National Skills Fund & Education and Training Development Practices SETA on their 2015/16 Strategic and Annual Performance Plans

Higher Education, Science and Innovation

27 May 2015
Chairperson: Ms Y Phosa (ANC)
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Meeting Summary

The National Skills Fund (NSF) in the presence of the Deputy Minister of Higher Education and Training, presented to the Portfolio Committee on its Strategic Plan, Annual Performance Plan and budget.

The Committee was told that the NSF developed a Fund Allocation Framework, which integrated key focus areas identified from key Government Strategies and Policy. The NSF explained that the key focus areas were identified from key Government Strategies, Programmes, Policies and Legislation such as the NDP, White Paper on PSET, MTSF and NSDS III.  

The NSF proceeded to describe the priorities of the entity for 2015/16.The following five priorities were identified:

  1. Human Resource Development priorities
  2. Ministerial priorities in consultation in consultation with the National Skills Authority (NSA)
  3. National priorities aligned to the key strategies of Government
  4. Priorities identified by the Director-General supporting the Skills Development Act
  5. Priorities to address skills infrastructure

Moreover, the NSF indicated that the total revenue expected by the NSF for the period 2015/16 is R3 239 551, that the total expenses of the NSF are R5 122 721 for 2015/16 and that as a result there is a R1 883 170 deficit for 2015/16. Mr Minnie explained that the deficit which will cause the NSF to utilise its reserve funds causing there to be R5 948 938 in the NSF reserves for the term 2015/16.It was explained that the total revenue of the NSF is currently growing at an average of 10% per year and that a provision for a 6% growth in revenue was made in the budget going forward. The NSF further explained that skills development grants are expected to peak above annual revenue as the NSF starts to utilise its accumulated reserves towards skills development over and above current revenue. Mr Minnie explained that this is due to the NSF’s high level of commitments towards skills development. The Chief Financial Officer (CFO) noted that there WAS an expected decline in accumulated surplus as NSF starts to utilise both its accumulated surplus and annual revenue towards skills development initiatives. The CFO explained that strategy four has not been developed as yet, and that the projects being funded relate to the current initiatives of the NSF such as artisan development.

The NSF explained that the fund serves the purpose of raising the low education rates which remains a challenge. The NSF should enable to attainment and accomplishment of the national priorities. The NSF explained that the entity has placed emphasis on the throughput of postgraduate students by improving the lecturing capacity of lecturers and will fund wider government strategies and adult education. The NSF added that it is contributing R574 million to the National Student Financial Aid Scheme (NSFAS) to promote the development of skills required for the labour market.

However, the Committee emphasised that there is a need for radical innovation. The Committee highlighted that desperation for skills development within the country and that only 70 000 learners trained in 5 years is an inadequate target in relation to the significant funds available for use by the NSF.

The Chairperson congratulated the NSF for their low administrative costs and for the unqualified audited opinions which the NSF has received. However, she emphasised the need for the NSF to receive a clean audit and that the NSF creates a responsive research and monitoring and evaluating unit in order to align performance with compliance.

A Member of the Democratic Alliance indicated that the NSF was vulnerable to dubious organisations at local level and that the NSF should be concerned regarding this occurrence.

The Deputy Minister indicated that the DA Member had made a serious insinuation which could not remain unchallenged. He indicated that hers was a very cynical observation and that if Parliament recommends further oversight measures, that Parliament should instruct the ministry to implement mechanisms.

The Committed indicated that if reserves are committed to future students, that the amount should decrease over the outer year however the reserves are increasing. The Committee noted that the table provided in the presentation was therefore misleading. However, the NSF explained that the funds are also committed to infrastructure, not only students.

In its conclusion, the Committee emphasised that the funding for skills development should be aligned to scarce skills. The explained that NSFAS requires funding and suggested that this funding may come from the significant reserves held by the NSF. The Committee further emphasised that the filling of vacant positions is critical and that there is a need for a strong monitoring unit within the NSF. The Committee also indicated concern that the plans are not clear for the respective NSF programmes.

The Education, Training and Development Practices (ETDP) Sector Education and Training Authority (SETA) presented to the Portfolio Committee on its five year strategic plan and annual performance plan (APP).

The ETDP SETA noted the various challenges experienced by the SETA and their subsequent impact on the entity. The ETDP SETA explained that the low submission rate of WSPs and the non-payment of mandatory grants results in money being moved to the discretionary fund late in the year, and that the unutilised funds are transferred to the NSF.

The ETDP SETA explained that with regard to programmes starting in the fourth quarter, that money is     committed at the end of the year and not spent. Additionally, it was noted that the issue of employed beneficiaries experiencing training clashing with work priorities results in the implementation of programmes being adversely affected as there is difficulty in enrolling teachers in training and that the teachers are limited to teach during holidays.

Moreover, the ETDP SETA indicated that unemployed youth changing from one programme to another

relates to the low rates of completions and high rate of dropouts and furthermore, that trained youth struggle to enter the labour market by finding suitable employment, therefore contributing to the high volume of unemployed graduates. The ETDP SETA further explained that the SETAs five year licence places limitation on impactful, bold system-changing interventions, as the entity is only able to implement short-term plans.

The Committee indicated that it is not able to exercise sufficient oversight over the disbursement of funds by the NSF owing to limited engagement. The Committee noted that the information provided aids the role of the Committee in undertaking its role of oversights and requested that the Committee indicates this in its reports to provide Parliament will exact figures.

The Committee explained that the issue of student indebtedness has not been sufficiently addressed owing to the over-commitment of funds which has created an unsustainable situation. The Committee requested that the NSF addresses this concern in order to make its commitment more sustainable

Furthermore, Committee enquired as to the consequences of non-payment of levies the corrective measures implemented by the Department for non-compliance. The Chairperson additionally enquired as to the authenticity of the report from the ETDP SETA as it was not signed by the Minister. Moreover the Committee referred to the consultancy allocation and indicated that there is a high discrepancy and emphasised the need for the fund allocation to increase. The Committee further indicated that the youth cohort-target is low and emphasised the need to prioritise youth development as the target of 2 per province in insufficient. The ETDP SETA explained that the Department is finalising the new SETA landscape and that Cabinet is being engaged on this document before it will be made available. The ETDP SETA referred to the needs analysis and noted that strategic planning sessions are required to conduct needs analysis. It was explained that once the ETDP SETA has developed a sector skills plan, the analysis will be utilised and included in the annual performance plan.

The Committee congratulated the ETDP SETA on its good governance and noted the unqualified audit from 2014 and its nine provincial offices which were established for increased accessibility. The Committee acknowledged the responsiveness on youth development however emphasised the need more emphasis on youth cohorts. The ETDP SETA was thanked for the plans which were aligned with government policies. However, the Committee indicated that the administrative costs are not aligned with government policy and that cost curtailment is necessary to enhance service delivery. In conclusion, the Committee welcomed the effort by the ETDP SETA to utilise discretionary funds.

Meeting report

Opening Remarks

The Chairperson welcomed the Members of the Committee and the delegates from the National Skills Fund (NSF) and the Education and Training Development Practices SETA. The Chairperson explained that the Committee raised concerns regarding underachievement of targets, vacant posts, and delays in establishing the legal persona of the NSF in addition to the inadequate monitoring and evaluation of funded projects and financial reporting.

The Committee Secretary noted apologies from Mr C Kekana (ANC) and Mr Y Cassim (DA) who arrived late. The Committee Secretary further noted the apology submitted on behalf of the Minister of Higher Education and Training, Dr Blade Nzimande, who was attending Cabinet.  

National Skills Fund Strategic Plan & Annual Performance Plan 2015/16     

Mr Mabuza Ngubane, DHET Director, presented on behalf of the NSF and explained that the Fund operates within the National Skills Strategy framework for 2015-2020.

Mr Ngubane explained that the National Skills fund is a catalytic fund which enables government to drive key skills strategies. Mr Ngubane proceeded to refer to the legislative mandate of the NSF and noted that the Director-General of Higher Education and Training is the Accounting authority of the National Skills Fund as stipulated in section 29(1) of the Skills Development Act (SDA). Mr Ngubane indicated that the Director-General shall, subject to the laws that govern the public service, appoint a person to be the executive officer of the NSF, who will, upon such appointment, be within the employ of the public service. He added that within the framework of the Director-General’s delegations of authority, the day-to-day operations of the NSF are managed by the Executive Officer. Furthermore, Mr Ngubane explained that in accordance with above legislation, all current NSF employees are within the employ of the public service as employees of the Department of Higher Education and Training (DHET).

Mr Ngubane explained that the Fund was listed on 12 October 2012 as Schedule 3A Public Entity in terms of the PFMA, retrospectively effective from 1 April 2012. Mr Ngubane explained that the NSF funds skills development projects of National Priority as per the NSDS and section 28 of SDA and skills development projects for the achievement of the SDA within discretion of the Director-General as per section 28 of SDA. Mr Ngubane added that the NSF is mandated to fund activities to achieve national standards of good practice in skills development and that the administration of the Fund is set within a 10% limit.

Mr Ngubane explained that the fund serves the purpose of raising the low education rates which remains a challenge. The NSF should enable to attainment and accomplishment of the national priorities.

Mr Ngubane explained that the NSF has placed emphasis on the throughput of postgraduate students by improving the lecturing capacity of lecturers and will fund wider government strategies and adult education. Mr Ngubane added that the NSF is contributing R574 million to the National Student Financial Aid Scheme (NSFAS) to promote the development of skills required for the labour market.

The Chairperson enquired about the report on scarce skills which was released by the Minister.

Mr Ngubane explained that Engineering, Science and Accounting have been identified as areas which experience challenge regarding capacity. Mr Ngubane explained that the booklet may be made available for the members.

Planning Process

Mr Ngubane explained that the NSF developed a Fund Allocation Framework, which integrates key focus areas identified from key Government Strategies and Policy. Mr Ngubane explained that the key focus areas were identified from key Government Strategies, Programmes, Policies and Legislation such as the NDP, White Paper on PSET, MTSF and NSDS III. 

Furthermore, Mr Ngubane explained that The NSF developed a Fund Allocation Framework, as advised by the NSA to the Minister and that the entity provides funds in accordance with the Fund Allocation Framework.

Key Focus Areas

  1. Educational institutions and employers partnerships linked to work integrated learning
  2. Effective skills demand planning through research and analysis including planning system
  3. Departmental review of legislation and White Paper alignment.
  4. Promoting partnerships and innovation in project delivery
  5. Technical and Vocational Education and Training (TVET) colleges capacitation and infrastructure
  6. Community Colleges and Public Adult Learning Centres (PALCs) development
  7. Sector Education and Training Authorities (SETA) landscape review
  8. Artisan development strategy operationalisation
  9. Development of scarce and critical skills (incorporating SIPs)
  10. Improve the quality of education and training in post-school education
  11. Facilitate partnerships and development of Small, Medium and Micro Enterprises (SMMEs)
  12. Worker, NGO and community-based education programmes
  13. Recognition of Prior Learning (RPL) integration
  14. Post-School Education and Training (PSET) system integration

NSF Key Priorities for Fund Allocation

The following five priorities were identified:

  1. Human Resource Development priorities
  2. Ministerial priorities in consultation in consultation with the National Skills Authority (NSA)
  3. National priorities aligned to the key strategies of Government
  4. Priorities identified by the Director-General supporting the Skills Development Act
  5. Priorities to address skills infrastructure

Human Resource Development Priorities

Mr Ngubane explained that within the framework of Human Resource Development Strategy of South Africa (HRDSSA) II, the NSF’s Fund Allocation Framework will prioritise the following:

  • Strengthen and support the expansion of TVET college access;
  • The production of intermediate skills (in particular artisans) and professionals;
  • The production of academics and stronger industry-university partnerships in research and development;
  • Strengthening foundational learning; and
  • Address worker education.

Ministerial Priorities in Consultation in Consultation with the National Skills Authority (NSA)

Mr Ngubane indicated that the successful delivery of the NSF relies on the role played by social partners in the delivery of skills. Mr Ngubane noted the following key initiatives that the NSF will fund and participate in:

  • Skills development legislation research and review, including integration thereof into education and training and national priorities of Government;
  • Constituency capacity building and NSA capacity building programmes;
  • National public dialogue and advocacy;
  • Skills marketing and communication, inclusive of annual skills conferences and exhibitions;
  • Provincial Skills Development Forums; and
  • Promoting good practice in skills development

National Priorities Aligned To the Key Strategies of Government

Mr Ngubane noted the following the following strategies which have been identified as national priority areas from various key strategies of Government:

  • New Economic Growth Path;
  • Industrial Policy Action Plan;
  • Skills to support rural development;
  • Skills for education and health;
  • Skills to support justice and crime prevention;
  • Skills to support co-operatives and small enterprises;
  • Public sector capacity building;
  • Skills for a green economy; and
  • Artisan development

Priorities Identified By the Director-General Supporting the Skills Development Act

Mr Ngubane explained that The Fund Allocation Framework will support skills required for the achievement of priorities as identified by the Director-General in support of the Skills Development Act, which includes worker education, skills system capacity building, the training Lay-Off Scheme, academia, research and  development as well as bursaries.

Priorities to Address Skills Infrastructure

Mr Ngubane indicated that the Fund Allocation Framework will support priorities to address key skills infrastructure gaps, which includes the following:

  • Public Delivery Infrastructure;
  • Community Education Centres Infrastructure;
  • Skills Development Institutes Infrastructure; and
  • State-owned Enterprises Infrastructure

Mr Ngubane explained that the training of artisans has been proven less expensive when undertaken in conjunction with state-owned enterprises.

Annual Performance Plan (APP)

Mr Ngubane stated that the NSF disburses funds and that it is therefore critical for the Fund to note the provision of funds for skills development.

Mr Ngubane explained that the NSF accumulated large reserves in the backlog of national skills shortages and capacity challenges within the broader education system. Mr Ngubane explained that the emphasis has been placed on partnerships to achieve its targets.

Mr Ngubane told the Committee that that the NSF is not an investment institution and cannot account for investment income, however that the Fund can commit its funds to the development of skills, training and capacity building, nationally.                     

Strategic Targets

The following strategic targets were identified:

  1. Effective and efficient programme/project preparation in order to promote effective and funds needs analysis, project feasibility, scoping and projects selection which is both proactive & reactive

Mr Ngubane indicated that the NSF aims to commit 100% of reserve funds towards skills development. He explained that this indicator encourages the NSF to not only utilise its revenue effectively towards skills development funding, but also put its historic accumulated surpluses towards effective use in funding skills development.

Mr Ngubane further noted that the NSF aims to Commit R2.66 billion of future income towards skills development by the end of the outer year. Mr Ngubane explained that since skills development takes place over a period of time, it is important to commit in advance to match expenditure outflow with revenue inflow as far as possible and prevent the continued accumulation of large reserves year-on-year.

Mr Ngubane added that the NSF aims to fund 70000 learners for training by the outer year. He explained that a major function of the NSF is to fund national skill development and therefore effective and efficient monitoring of the learners funded on national priority projects / programmes is paramount to the effective and efficient operations performed to achieve the entity's goals.

Mr Ngubane explained that the NSF aims to disburse 90% of grant income received. Mr Ngubane indicate that the purpose of this indicator is to maximise the NSF’s disbursement towards skills development in relation to the NSF’s income received.

Mr Ngubane added that the NSF aims to fund 80% of earmarked infrastructure projects by the outer year. He explained that the purpose of the NSF is to facilitate skills development within South Africa, therefore it is essential that projects that are earmarked for funding are timely followed through towards implementation. He explained that the disbursement of funds catalyses implementation of the skills infrastructure development

  1. Effective and efficient project management in order for the NSF  be effective and efficient in project management, which consists of project start up, implementation support, disbursements, monitoring, evaluation and closure.

Mr Ngubane explained that the NSF aim to have 90% of key funded positions filled by each year-end and 70% of the total funded positions filled by outer year. He explained that in order to function efficiently and effectively the NSF needs to have sufficient staff capacity in place in order to carry out the necessary functions required to achieve the objectives of the NSF.

Mr Ngubane added that the NSF aims to implement 70% of key ICT needs by the outer year. Mr Ngubane explained that the timely availability of the ICT is essential for the effective and efficient operations of the NSF in achieving its objectives.

  1. Excellence in resource management

Mr Ngubane explained that this objective aims to address strategic resource management aspects for the NSF, which is critical in achieving excellence in resource management. Mr Ngubane noted that resource management includes a number of areas, specifically, research and analysis, HR management, financial management, ICT management, information/knowledge management, infrastructure/facilities management and shared logistical services management. He explained that most of the performance indicators in these areas are operational in nature and have not been included in the strategic plan. However, that these resource areas that require specific interventions that are key in the achievement of other strategic objectives are included in the strategic plan.

Strategic Risks

Mr Ngubane described the following strategic risks identified by the NSF and indicated the mitigation actions which will be taken by the Fund:

  1. Organisational structure

Mr Ngubane explained that indicated that there is a risk of operational inefficiency and strategic objectives not being met due to an inappropriate operating structure. Mr Ngubane indicated that the NSF is in the process of reviewing and expanding its organisational structure to address its current capacity constraints.                                                                                     

  1. Integrated ICT system
  2. Mr Ngubane explained that there is a risk of strategic objectives not being supported by an effective and efficient integrated ICT system. Mr Ngubane indicated that the NSF will procure expertise ICT consultancy services to develop and implemented an effective and efficient integrated ICT system for the NSF.
  3. Stakeholder relationship management

Mr Ngubane noted an inability to anticipate/interpret and manage shifts in the information stakeholders want and the way in which they want it communicated to them and ineffective ongoing, transparent communications with the public in order to create goodwill. Mr Ngubane explained that the NSF will build the necessary HR management capacity to assist in the development of a well-defined People/HR strategy that supports the entity and its strategic objectives, employee needs and desires and organisational mission, vision and values.

  1. People/HR strategy

Mr Ngubane noted failure to have a well-defined people/HR Strategy that supports the entity and its strategic objectives, employee needs and desires and organisational mission, vision and values. Mr Ngubane explained that the NSF will build the necessary HR management capacity to assist in the development of a well-defined People/HR strategy that supports the entity and its strategic objectives, employee needs and desires and organisational mission, vision and values.

  1. Performance, Monitoring and Evaluation (PME)

Mr Ngubane indicated the lack of effective Integrated Performance Monitoring and Evaluation

(PME) across the organisation and explained that through Project Siyaphambili, the NSF will implement effective integrated PME across the organisation.

Budget

Mr Wean Minnie, NSF Chief Financial Officer (CFO), presented the budget of the NSF to the Portfolio Committee.

Mr Minnie indicated that the total revenue expected by the NSF for the period 2015/16 is R3 239 551, that the total expenses of the NSF are R5 122 721 for 2015/16 and that as a result there is a R1 883 170 deficit for 2015/16. Mr Minnie explained that the deficit which will cause the NSF to utilise its reserve funds causing there to be R5 948 938 in the NSF reserves for the term 2015/16.                

Mr Minnie explained that the total revenue of the NSF is currently growing at an average of 10% per year and that a provision for a 6% growth in revenue was made in the budget going forward.                 

Mr Minnie further explained that skills development grants are expected to peak above annual revenue as the NSF starts to utilise its accumulated reserves towards skills development over and above current revenue. Mr Minnie explained that this is due to the NSF’s high level of commitments towards skills development.                 

Mr Minnie noted that there is an expected decline in accumulated surplus as NSF starts to utilise both its accumulated surplus and annual revenue towards skills development initiatives. Mr Minnie explained that strategy four has not been developed as yet, and that the projects being funded relate to the current initiatives of the NSF such as artisan development.

Mr Minnie indicated that the cost for skills development grant disbursements is R4 866 431 and that administrative costs are R256 290. Mr Minnie explained that the NSF’s total administrative costs, excluding SARS collection costs, were at 4.9% of its total revenue, making the Fund administratively a cost-efficient organisation in comparison with other levy organisations. He explained that according to the Skills Development Act, the collection cost to SARS is the responsibility of the NSF and noted that the SARS levy collection rate is expected to be 0.4%.

Discussion

Dr B Bozzoli (DA) noted that the fund has little oversight in relation to its size and funds. She noted that the 164 projects which the NSF has undertaken should be included in the Annual Performance Plan.

Dr Bozzoli indicated that the NSF is vulnerable to dubious organisations at local level and that the NSF should be concerned regarding this occurrence. She asked if whether the mandate of the fund is to train government employees. Dr Bozzoli explained that it is concerning that the fund receives inadequate oversight for its magnitude. She enquired about the composition of the Board and if the levy payers are reported to. She referred to the funds disbursed to students in TVET colleges and Enquired as to whether is sustainable and how the NSF aims to ensure that it is sustainable.                       

Mr E Siwela (ANC) enquired as to the level at which the skills required for the economy will be met.                       

Mr Siwela enquired as to the current vacancy rate and the levels at which the vacancy rate is high.                   

Ms J Kilian (DA) enquired as to what extent are government priorities adjusted and to what extent the NSF is able to align the priorities.

Ms Kilian asked to what extent the Skills Fund and the Department will address the ICT sector and training and development of technology in this sector. Ms Kilian noted that the strategic risks create concern owing to the absence of an effective management system. Ms Kilian enquired as to the relevant skills required and the results regarding the development of these skills.

Ms Kilian emphasised that the NSF will need to engage with the Committee more regularly to ensure that the risks are mitigated.

Ms Nkadimeng (ANC) asked which skills will be targeted and what criteria and NQF level will be required to be met.

Ms Nkadimeng enquired as to whether the NSF has implemented the development plan to address the issues identified by the Auditor-General to be achieved within the committed timeframe.

Mr Cassim (DA) explained that the Committee is not able to exercise sufficient oversight over the disbursement of funds by the NSF owing to limited engagement. Mr Cassim noted that the information provided aids the role of the Committee in undertaking its role of oversights and requested that the Committee indicates this in its reports to provide Parliament will exact figures.

Mr Cassim indicated that R1.8 billion has been overspent, thus reducing the NSF reserve and indicated that the Annual performance Plan does not reflect this in its trends of spending.

Mr Cassim enquired as to the reason why the funds allocated for priorities had been decreasing. Mr Cassim explained that the issue of student indebtedness has not been sufficiently addressed owing to the over-commitment of funds which has created an unsustainable situation. Mr Cassim requested that the NSF addresses this concern in order to make its commitment more sustainable.

Mr Cassim enquired as to whether measures have been taken to correct the issues identified by the auditor-general and what action was taken with regard to senior management officials.

Mr Cassim explained that funds and bursaries at TVET colleges are being used inefficiently and that there is a lack of oversight regarding the spending of public funds. Mr Cassim noted that the inefficiency results in high dropout rates.

Mr Cassim enquired as to whether the monitoring function extends to students absorbed by the labour market.

Ms Mchunu (ANC) noted that the Department is responsible for national outcome five and indicated that emphasis has been laced on skills development. Ms Mchunu expressed concern regarding the area of focus and noted that historically disadvantaged black youth should be an area of focus.

Mr Ngubane explained that the NSF operates on the basis of a strategic plan and the annual performance plan in order to execute its mandate. Mr Ngubane further explained that the training which is approved by the NSF takes place on the basis of the creditability of the programme being offered.

Mr Ngubane added that in determining the accreditation of the programme, that the authority providing the programme has met the requirements for due diligence.

Mr Ngubane explained that the NSF does not disburse money to government departments to train government employees, as 1% of government pay roll should be allocated to this function.

Mr Cassim welcomed the response from the Director-General.

Mr Cassim noted that the funds being allocated require capacity to ensure that the funds are administrated successfully.

Mr Cassim enquired as to the entity responsible for monitoring the NSF for the annual programs being implemented. Mr Cassim indicated that the oversight of the Committee is limited to the strategic plan and that the Committee does not have specific oversight over the programmes in operation.

Mr Cassim recommended a mechanism for oversight for the administration of public funds.

Ms Kilian explained that the Committee has an ability to enquire as to the disbursement of the funds and assess the result of the funds allocation. Ms Kilian said the Department was required to respond to the Committee.

The Chairperson referred to public sector capacity building and noted that students have not been absorbed owing to the lack of infrastructure. She sought clarity on the use of the phrase ‘outer year’ and how this relates to the financial year. She enquired as to the reason why the reserve funds not being redirected to address critical issues.

Mr Ngubane explained that the strategic plans and annual performance plans are directed by government strategy, government priorities and system strategies and priorities.

Mr Minnie responded to the question posed by the Chairperson and explained that the ‘outer year’ refers to the 2019/2020 year. Mr Minnie explained that infrastructure projects last more than a year and therefore preparation processes are required beforehand.

The Chairperson emphasised that there is a need for radical innovation. She said desperation for skills development within the country and that only 70 000 learners trained in 5 years was an inadequate target in relation to the significant funds available for use by the NSF.

The Chairperson reiterated that the NSF has significant funds which can be utilised to reduce the concern of skills development. She stated that the NSF should consider a redirection of funds.     

Mr Ngubane explained that the money in the NSF reserves is committed.

Mr Minnie explained that the money in the NSF is committed in contracts and that the NSF aims to increase its commitments.

Mr Cassim indicated that if reserves are committed to future students, that the amount should decrease over the outer year however the reserves are increasing. Mr Cassim noted that the table provided in the presentation was therefore misleading.

Mr Minnie explained that the funds are also committed to infrastructure, not only students.

The Chairperson emphasised the need for a clear explanation from the NSF.

The Deputy Minister indicated that Dr Bozzoli had made a serious insinuation which could not remain unchallenged. He indicated that hers was a very cynical observation and that if Parliament recommends further oversight measures, that Parliament should instruct the ministry to implement mechanisms.

The Chairperson congratulated the NSF for their low administrative costs and for the unqualified audited opinions which the NSF has received. However, she emphasised the need for the NSF to receive a clean audit and that the NSF creates a responsive research and monitoring and evaluating unit in order to align performance with compliance. She emphasised that the funding for skills development should be aligned to scarce skills. NSFAS requires funding and suggested that this funding may come from the significant reserves held by the NSF. The filling of vacant positions is critical and that there is a need for a strong monitoring unit within the NSF.

The Chairperson indicated concern that the plans are not clear for the respective NSF programmes.

Education, Training and Development Practices (ETDP) SETA Five Year Strategic Plan and 2015/26 Annual Performance Plan (APP)

Ms Shirley Mabusela, ETDP SETA Chairperson, presented on the 5 year strategic plan and the APP for 2015/16.  Ms Mabusela indicated that the budget has been tabled, however it has not been finalised and was therefore not included in the presentation to the Portfolio Committee.

Ms Mabusela explained that the ETDP SETA skills planning and implementation is guided by the MTSF outcomes for 2014-2019, specifically outcome 6.1 and outcome 6.5 which relate to quality basic education and a skilled and capable workforce to support an inclusive growth path, respectively. Ms Mabusela added that the outcomes inform the 6 outcome strategic oriented goals of the ETDP SETA in the five year strategic plan.

Ms Mabusela explained that, in addition to the MTSF outcomes, the ETDP SETA skills planning and implementation is guided by the NDP Vision for 2030, the White Paper on Post School Education and the ETD Sector Skills Plan.

Ms Mabusela indicated that the aim of the ETDP SETA is to promote and facilitate the development and improvement of the skills’ profile of the sector’s workforce in order to benefit employers, employees, workers and the unemployed.

Ms Mabusela noted the following strategic outcome orientated goals and ETDP SETA goal statements:

  1. Strategic Outcome Oriented Goal 1: Research focused on improving sector skills planning, employability and productivity for economic growth by March 2020

Ms Mabusela explained that the ETDP SETA aims to utilise empirical research conducted to inform labour market forecasting and scenario planning in the post school education and training system.

  1. Strategic Outcome Oriented Goal 2: Highly skilled, transformed and productive personnel for improved teaching and learning in schools, TVET colleges and higher education institutions by      March 2020                                 

Ms Mabusela explained that the ETDP SETA aims to facilitate capacity building for teachers and managers in schools, researchers and lecturers in higher education institutions and lecturers and managers in TVET colleges in order to drive transformation and improve teaching and learning.     

  1. Strategic Outcome Oriented Goal 3: People centred and service oriented public workforce for improved service delivery within the post school education and training 

Ms Mabusela explained that the ETDP SETA aims to enhance the skills and competencies of the post education and training public service personnel with special focus on practitioners and administrators

  1. Strategic Outcome Oriented Goal 4: A seamless post school education and training system that addresses access and progression into high level skills and work placement for career and occupational development by March 2020.

Ms Mabusela explained that the ETDP SETA aims to ensure access to and articulation of learning pathways within the TVET, HEI and workplace placements to allow for a seamless career path that leads to successful completion of programmes in the ETD sector.

  1. Strategic Outcome Oriented Goal 5: Enhance capacity in non-schooling constituencies such as non-governmental organisations (NGOs); library and archival services; political parties and trade unions through skills development

Ms Mabusela explained that the ETDP SETA aims to build human and institutional capacity within the non-schooling ETD sector constituencies.

  1. Strategic Outcome Oriented Goal 6: Strengthen the ETDP SETA corporate governance, leadership and operational effectiveness and efficiency

Ms Mabusela explained that the ETDP SETA aims to improve organisation performance through effective and efficient leadership, management and administration.

Ms Nombulelo Nxesi, Chief Executive Director (CEO), ETDP SETA, explained that the entity’s mandate is derived from the Skills Development Act

Programmes

Ms Nxesi described the ETDP SETA programmes for 2015/16 and noted the following:

Programme 1: Development of a credible SSP

Ms Mabusela explained that the purpose of this programme is to create institutional capacity for skills planning and mechanisms for addressing the gap and/or mismatch between the supply of and demand for skills in the ETD sector.

Programme 2: Quality teaching and learning in schools, TVET Colleges and Higher Education Institutions (HEIs)

Ms Mabusela explained that the purpose of the programme is to improve the quality of teaching and learning in schools, TVET colleges and higher education institutions and to contribute to a transformed higher education environment.

Programme 3: Improving public service delivery in the ETD sector

Ms Mabusela explained that the purpose of the programme is to capacitate those involved in public administration functions and to have direct bearing and impact on education and training with the necessary skills to perform their duties.

Programme 4: Youth development initiatives

Ms Mabusela explained that the purpose of the programme is to provide Career Development Services, increase access to occupationally directed programmes and to provide youth with workplace learning and experience for employability.

Programme 5: Supporting ETD constituencies for skills development

Ms Mabusela explained that the purpose of the programme is to build human and institutional capacity within the ETD sector constituencies by means of the following:

  • Development support for Trade Union Federations
  • Skills development support for Political Parties
  • Skills development support for NLPEs
  • Skills development support for Youth Cooperatives
  • Skills development support for Training providers (APPETD and non-APPETD)

Programme 6: Enhancing organisational management and administration for quality service delivery

Ms Mabusela explained that the purpose of this programme is to enhance organisational management and administration to ensure that the ETDP SETA fulfils its skills development mandate.

Programme 1: Focuses on building and strengthening an internal research capacity in order to develop a credible SSP with updated data from all ETDP SETA constituencies.

Programme 2: Focuses on teacher and lecturer development projects in order to contribute to a sound and well-functioning schooling and post schooling education and training systems. Furthermore the programme also contributes to increasing pool of graduates from the post school education institutions for intermediate and high level skills in the sector.

Ms Nxesi explained that the the career development and guidance programme is one of the ETDP SETA’s flagship project and that Career Development interns have been allocated to the TVET colleges to support the student Liaison Managers and to provide career guidance to the nearby schools and communities. Ms Nxesi added that the project also aimed at ensuring our presence in all the 50 TVET Colleges. She explained that the project is multi-fold, that it creates jobs as those who did not drop out are now in their fourth year at the Colleges and that the stipend provides economic support and they add value to the colleges and the communities.

Programme 3: This programme focuses on the enhancement of skills for personnel in public institutions and departments of the ETD sector and administrative and managerial support.

Ms Nxesi explained that the programme provides pre-service training of teachers and that the training of Grade R practitioners remains critical and we continue to engage DHET and other institutions on possible RPL of the parts of the qualification. Ms Nxesi Most of the practitioners that aspire to be Grade R practitioners completed Level 4 and 5 ECD on Learnerships. However, Ms Nxesi explained that the entry requirements for B.Ed are difficult and they are not in a position to meet those minimum criteria.

Programme 4: Aims at the development of the unemployed youth to acquire workplace skills for employability through increasing the support to access workplace learning and ensure the suitability of the policies.

Ms Nxesi indicated that there was a significant demand for bursaries both new and renewals which we were able to provide to 500 needy students. She explained that the student recruitment drive for bursaries included announcements in the regional and community radio stations and the nine provincial 'Indabas' that were led by the CEO.

Ms Nxesi explained that workplace experience was provided for both the TVET and the Universities of Technology students to gain work place experience and that the ETDP SETA has distributed approximately 28 000 career guidance booklets to secondary school learners targeting grades 9 to 12.             

Ms Nxesi explained that the SETA placed over 1000 interns in schools and will continue for a duration of at least three years hoping that the schools will eventually absorb them as administrators.

Learnerships

Ms Nxesi added that the ETDP SETA has also placed unemployed youth in various Learnerships which include library practice, Environmental Practice, ABET and End User Computing. People with disabilities were recruited and provided with additional resources required for accessibility of the programmes.

Ms Nxesi indicated that the SETA has converted their scarce and critical skills guide, the career guidance and provincial reports to Braille and that In the SETA meetings and workshops where deaf learners have been present, a sign language interpreter has been made available.

Recognition of Prior Learning (RPL)

Ms Nxesi indicated that the ETDP SETA has realised the ‘long dream’ of RPL implementation. She noted that the SETA has succeeded in establishing three RPL centres, at Umgungundlovu TVET College in KwaZulu-Natal, Ingwe TVET College in the Eastern Cape, and Orbit TVET College in the North West Province. Ms Nxesi added that a group of RPL candidates have commenced with the programme and that the programme is meant to take into cognisance past learning and experience in order to accelerate the attainment of a qualification. She explained that the first group has enrolled on ECD and Community Development Level 4 qualifications.                             

Programme 5: Focuses on the development of human resources and institutional capacity of the ETDP SETA constituencies through skills development by supporting them to acquire scarce and critical skills as identified in the SSP.

Ms Nxesi explained that the programme is aimed at providing support and skills development for all our constituencies in the sector. She indicated that, as per the outline of the targets in the section on Performance information, not all constituencies took up the discretionary grant and some could not reach their targets. Ms Nxesi noted that the ETDP SETA is developing new strategies to fast track this programme and entice our constituencies.

Programme 6: Aims at improving organisational performance through effective leadership, management and administration.

Ms Nxesi explained that sector skills plan is critical and that The SSP was updated and the scarce and critical skills guide developed and distributed.  Ms Nxesi indicate that the ETDP SETA has also established six research chairs in various HEIs to assist in the capacity development of our research agenda and strategy as well as continuously improving their SSP.

Sector Skills Plan (SSP)

Ms Mabusela explained that the purpose of this programme is to create institutional capacity for skills planning and mechanisms for addressing the gap and possible mismatch between the supply and demand for skills in the ETD sector.

Ms Mabusela explained that the ETDP SETA provides learner career guidance in order to reduce the dropout rates for first year students in higher education.

Ms Mabusela indicated that the banning of corporal punishment in schools has resulted in teachers being uncertain of corrective measures with regard to learner discipline, especially in rural schools.

Challenges

Ms Mabusela described the following challenges and their respective impacts:

1. Low rate of WSPs submission

Ms Mabusela explained that the low submission rate and the non-payment of mandatory grants results in money being moved to the discretionary fund late in the year, and that the unutilised funds are transferred to the NSF.

2. Academic year in relation to the financial year

Ms Mabusela explained that with regard to programmes starting in the fourth quarter, that money is committed at the end of the year and not spent.  
3. Employed beneficiaries experiencing training clashing with work priorities

Ms Mabusela explained that this results in the implementation of programmes being adversely affected as there is difficulty in enrolling teachers in training and that the teachers are limited to teach during holidays.

4. Unemployed youth changing from one programme to another

Ms Mabusela explained that this challenge relates to the low rates of completions and high rate of dropouts.

5. Trained youth finding no employment and therefore contributing to the high volume of unemployed graduates.           

6. SETAs five year licence

Ms Mabusela explained that the short term plans places limitation on impactful, bold system-changing interventions.

Discussion

Mr Cassim acknowledged the efficiency and reporting of the SETA. He noted that the payments made for administration had increased significantly and enquired as to the actual functions of the SETA as the functions in the presentation should be undertaken by the Department and therefore, there is a duplication of roles. He enquired as to the impact of the SETA’s programmes.

Mr Cassim referred to the money invested for political parties, and enquired as to the educational role of the political parties, the requirements and who the political parties are.

Ms Mchunu asked if the programme on upskilling will be focused on urban or rural learners. What the spread of teachers per province will be and whether this target is responsive to the demand for teachers? He indicated that the existence of too many programmes which reduce the targets per programme and recommended that the SETA’s programmes are confined to make a significant impact.

Ms Nkadimeng referred to the renewal of bursaries and enquired as to how many TVET colleges and universities are targeted and what the requirements are.

Mr Siwela acknowledged that the SETA has been successful.

Mr Siwela enquired as to the duration of administrators in schools.

Ms Kilian referred to the list of the top 10 scarce skills and recommend that the ETDP renews its focus and invests for maximum impact and employs radical interventions.

Ms Mabusela indicated that it was appropriate timing as the SETA is planning to have a strategic plan for 2016 and that the Committee’s the input will assist.

Ms Nxesi thanked the committee for the commendations and constructive inputs by the members.

Ms Nxesi referred to the number of programmes and indicated that the ETDP SETA, in conjunction with the Department of Basic Education, identifies critical areas of priority.

Ms Nxesi explained that because the revenue is limited, government departments only disperse 10% to SETAs and that the 30% capital contribution will improve the impact of the SETA. Ms Nxesi explained that if the SETA received the additional 1% from government, the SETA would be able to undertake its programmes more effectively.

Ms Nxesi explained that a high proportion of funds are spent on administration and that smaller and shorter programmes do not have great effect. Ms Nxesi explained that dealing with systemic issues is of critical importance.

Mr Cassim explained that the government invests a significant proportion into basic education and a reduced proportion into higher education. He expressed the need for increased administrative efficiency as SETAs have inflated bureaucracies and the funds should be spent effectively.

Ms Mchunu referred to the assistance offered to schools, and asked if the programmes are biased towards public schools and if historically disadvantaged institutions are prioritised.

Ms Kilian expressed a concern regarding unemployed graduates and noted that the critical skills needs list should be aligned with these records.

Ms Nxesi explained that in terms of the skills development levies act, departments may pay 10% as a contribution however this clause did not place emphasis on this levy. She indicated that Gauteng, Limpopo and Mpumalanga paid 30% and that the other constituencies are budgeting for this.

Ms Nxesi indicated that Programme 2 was accomplished with the 10% contribution from the departments. She explained that Gauteng paid R16 million and an addition R40 million for discretionary funding. She added that Mpumalanga contributed 18million as additional funding and that Limpopo contributed 11%.

Ms Nxesi explained that the interns were paid and now receive R5000, which contributes towards job creation.

Ms Nxesi referred to the bursary and indicated that R50000 was allocated for NQF level 6 for 12 months. She explained that the ETDP SETA Realised that R50 000 is not enough for all students and is considering amending discretionary grants.

Ms Nxesi explained that the National treasury has noted cost containment measures for the SETAs.

Ms Nxesi indicated that bias is placed on public entities and public schools and that the majority of the funds is allocated to public institutions.

Ms Nxesi explained that the ETDP SETA is able to provide further information in the report.

Ms Nxesi acknowledged that working in silos will not have a significant effect.

Ms Nxesi responded to the question regarding unemployed graduates and explained that the ETD SETA does currently have a tracking system which is managed though the University of KwaZulu-Natal (UKZN).

Ms Nxesi explained that research has been conducted on the effectiveness of internship with regard to sustainable employment.

Wayne Cotton, Chief Financial Officer (CFO), ETDP SETA, explained that the SETA incurs high administrative costs owing to the manner in which its business is transacted.

Mr Cassim enquired as to whether a needs analysis has been conducted and if it will be conducted.

Mr Cassim enquired as the details of the Prior Learning Programme.

Mr Cassim noted the issues of the Funza Lushaka bursary which included the ineffective placement of graduates in public schools. He explained that the existence of multiple bursaries creates an issue of monitoring and evaluation.

Mr Cassim asked if learners aware of the programmes for Matric learners who do not qualify for higher education.

The Chairperson asked the Department if they have a transformation plan for the crossover for 2016 and whether the SETA is creating a handover report providing institutional memory when it ceases to exist. She enquired as to the consequences of non-payment of levies the corrective measures implemented by the Department for non-compliance. The Chairperson enquired as to the authenticity of the report from the ETDP SETA as it was not signed by the Minister.

The Chairperson referred to the target for the recognition of Prior Learning and noted that the target of 300 is not reasonable and needs to be increased. She further enquired as to the selection criteria. The high rate of school dropouts was due to insufficient career advice. She referred to the consultancy allocation and indicated that there is a high discrepancy and emphasised the need for the fund allocation to increase.

The Chairperson said the youth cohort-target was low and emphasised the need to prioritise youth development as the target of 2 per province in insufficient. She emphasised the need to combine programmes for greater effectiveness. The Chairperson asked why chairs have not been appointed to previously disadvantaged institutions and enquired as to the criteria for appointment and the selection of institutions. She enquired as to the equity of the appointments with regard to the Employment Equity Act.   

Ms Nxesi explained that the Department is finalising the new SETA landscape and that Cabinet is being engaged on this document before it will be made available.

Ms Mabusela referred to the needs analysis and noted that strategic planning sessions are required to conduct needs analysis. She explained that once the ETDP SETA has developed a sector skills plan, the analysis will be utilised and included in the annual performance plan.

Ms Mabusela explained that teacher absorption is a concern.

Ms Mabusela indicated that the ETDP SETA will establish a report for 2016.

Ms Nxesi explained that the target of 300 is owing to the programme being in its pilot phase and that the brochure provides a broader spectrum of the programme.

Ms Nxesi referred to the research chairs and explained that the SETA is investigating the concept of entrepreneur development as an innovative approach.

Ms Nxesi referred to the handover report and explained that the SETA will evaluate APP of the previous year and assess the impact and achievements and provide a report on what has been achieved over the past five years.

Ms Nxesi referred to the annual performance plan not being signed and explained that the report had been tables and approved and that a letter was attached to indicate that the Minster has approved the strategic plan and the annual performance plan.

Mr Theuns Tredoux, Chief Financial Officer (CFO), DHE, referred to the Department’s intervention strategy for non-payment on levies and explained that regulations for payment were stopped by national treasury. He indicated that legal team is currently evaluating the implications of the regulations and the implementation, and that action will be taken based on the outcome of this committee review.

The Chairperson indicated that the Committee would appreciate follow-ups with these committees. She congratulated the ETDP SETA on its good governance and noted the unqualified audit from 2014 and its nine provincial offices which were established for increased accessibility. The Chairperson acknowledged the responsiveness on youth development however emphasised the need more emphasis on youth cohorts. She indicated that a pilot study should have been prioritised on the establishment of the SETA in 2011 and not at the end of its term.

The Chairperson thanked the ETDP SETA for the plans which were aligned with government policies.

However, she indicated that the administrative costs are not aligned with government policy and that cost curtailment is necessary to enhance service delivery.

The Chairperson noted that the Committee welcomed the effort by the ETDP SETA to utilise discretionary funds.

The meeting was adjourned.

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