Sector Education & Training Authorities SASSETA and CATHSSETA on their 2015 Strategic Plans

Meeting report

Sector Education and Training Authorities on their 2015 Annual and Strategic Plans
Safety and Security (SASSETA)

Ms Jennifer Irish-Qhobosheane, Administrator, SASSETA, noted that she had been appointed as Administrator in February, when the Authority was placed under administration by the Department of Higher Education and Training (DHET or the Department), and by that stage the Annual Report and Strategic Plan had already been forwarded to Parliament. She would, after the Chief Executive Officer's presentation, detail what was being done to address the issues raised by the Auditor-General.

Ms Manana Moroka, Chief Executive Officer, SASSETA, stated that the 2015-2020 Strategic Plan and APP were reviewed during the middle of 2014. The review was informed by the Department's Service Level Agreement (SLA) and looked into organisational structure. SASSETA had introduced several new functions that needed to be aligned to the structure, such as Chief Operations Officer, Strategic Human Support, Governance, Risk and Compliance and Information Security Officer. The budget was revised to align to the APP and ensure all targets were supported.

She outlined the programmes of SASSETA, and noted that the programme on Skills Planning, Research, Monitoring and Evaluation had the purpose of developing a credible institutional mechanism for skills planning, to provide reliable information on supply and demand for skills in the Safety and Security sector. The strategic objectives were to establish a credible institutional mechanism for continuous skills planning, establish partnerships with universities for labour market research and commissioned research by 2019/2020, build capacity within five government departments for skills planning and submission of WSPs/ATRs by 2019/2020 and to monitor and evaluate all discretionary grants projects by 2019/2020.  She also highlighted the commensurate performance indicators; baseline and the 2015/16 target of the each objective (see attached document for full details).

The purpose of the second programme, on Skills Implementation was to facilitate the delivery of quality learning programmes, specifically targeting the scarce and critical skills within the sector. There would be  identification of skills development provision challenges, and these would be addressed to ensure improved access to quality, and relevant education and training in the sector. including rural areas. Under this programme, the strategic objectives were:
- to develop training partnerships agreements with Universities and Vocational Training colleges (TVETS)
- implementation of the training targets and Service Level Agreement with DHET
- implementation of the training targets and Service Level Agreement with DHET
- providing  support to Trade Unions, NGOs, CBOs, NLPE and small and medium and micro enterprises (SMMEs)
- establish a partnership with Quality Council for Trades and Occupations (QCTO)
- implement flagship programmes.

She also highlighted the commensurate performance indicators; baseline and the 2015/16 target of the each objective (see attached document).

Discussion

At this point Dr B Bozzoli (DA) observed that Members already had the reports, and it was not necessary to go through them line by line in detail.

The Chairperson asked if she had an alternative to propose, and if not, suggested that perhaps Ms Moroka should go through the most important areas.

Ms J Kilian (ANC) felt that it was necessary also to hear from the Department of Higher Eduction and Training, particularly on the SASSETA Fund. The Administrator should also address this issue

The Chairperson reminded Members that the practice was to allow those presenting to speak before asking questions and suggested that the presentation continue.

Continuation of SASSETA presentation
Ms Moroka proceeded with her presentation. She said that in 2014/2015, the organisation established the office of the Chief Executive Officer. The purpose of this is to provide strategic direction and leadership to SASSETA with regard to implementation of strategic priorities in the Sector Skills Plan and Strategic Plan and the Annual Performance Plan. The strategic objectives revolve around putting corporate Governance framework to the institution in place, developing and implementing Sector Skills Plan and Strategic Plan of the SETA by 2019/2020, establishing SASSETA footprint at Provincial level to improve delivery of services by 2020 and establishing partnerships with universities and TVETS. 

During the same period, the organisation established the office of the Chief Operating Officer (COO). The purpose of this is to co-ordinate strategic planning implementation within SASSETA. This means that the Strategic Plan and the APP would be developed by the COO.  Other strategic objectives are to ensure compliance with National Treasury Budgeting and Planning Framework related time-lines, establishment of a transparent contract management system, establishment of effective stakeholder management system, establishment of a governance system within SASSETA. The COO is also to ensure adequate compliance with legal frame-work, develop, implement and review organisational structure and develop a Risk Management strategy that addresses the control environment of SASSETA by 2018/19.

The Finance programme is set to design and implement financial controls that ensure good financial governance and financial viability of SASSETA. To achieve this purpose, the strategic objectives included:

- increasing transparency, good governance (with effective management of resources),
- establishing and maintaining appropriate asset management and supply chain management systems
- ensuring effective collection of contributions and levies from government departments annually.

The Corporate Services programme is designed to provide effective and efficient corporate human capital, integrated marketing and communication and information technology and administrative support to the entity. The strategic objectives were carefully drawn to increase implementation of an integrated ICT system. Other objectives include Implemented and reviewed Human Capital Management Strategy in the SETA by 2019/20, establishment of the effective marketing and communications of SASSETA, and establishment of the document management system.

Ms Irish-Qhobosheane then dealt with details of the administration of SASSETA, confirming that it was placed under administration on 12 February 2015. The Minister and Director General of Higher Education and Training took this decision based on the performance of SASSETA, irregularities identified, and non-compliance with the Skills Development Act No 97 of1998, and other relevant legislation.

Ms Irish-Qhobosheane was appointed for a period of 12 months as administrator. The powers and duties of the administrator are to:

• Take over as the Accounting Authority
• Establish the necessary chambers (with approval of Minister)
• Review the conditions of employment of staff
• Review general governance of SASSETA
• Suspend, institute disciplinary procedures or replace (where necessary) any official
• Consult widely with relevant stakeholders in order to adopt a standard constitution for SASSETA
• Ensure management of SASSETA funds
• Establish effective rules for the Body

She focused on the key challenges and problems facing SASSETA. Her main area of concern was planning processes within SASSETA. Since taking office, the Administrator reviewed a number of reports on SASSETA,  including the Auditor General South Africa's (AGSA‘s) Interim Audit Findings, the situational analysis of the national GTAC team, the Budget Review and Recommendations Report of the Portfolio Committee, and reports from the DHET. Based on these, and the Administrators own analysis, the following key problem areas had been identified as needing to be addressed by the Administrator:

• Inadequacies in the planning and reporting processes within SASSETA (including Strategic Planning and Annual Performance Planning)
• Issues regarding the overall performance of the body and ability to report on achievements
• Problems regarding the general governance of the body
• Lack of formal proper decision making processes (as well as documentation linked to this decision making)
• Problems in the budget structure.
• Mismanagement of the Discretionary Fund, and serious irregularities in a number of contracts entered into
• Lack of effective contract management
• Inadequacy of policy and procedures within the body and non-adherence to those policies and procedures that exist
• Non compliance with the Public Finance Management Act (PFMA) and other related National Treasury requirements
• Lack of financial controls within the body, which had resulted in serious over commitment of SASSETA by more than 264% (R300 million)
• A culture of lack of accountability and impunity, as well as ethical issues
• Irregularities in the appointment of staff within SASSETA
• Lack of data integrity, and absence of data management
• Absence of monitoring and evaluation processes within the body
• Lack of understanding of the security sector
• Lack of risk management with the body
• Serious backlogs in the issuing of certificates
• Issues around the management of human resources
• Ineffective stakeholder management
• Serious security issues related to both physical security and information security

Ms Irish-Qhobosheane noted that the one of the issues identified by AGSA, National Treasury (NT) and the Department was that the planning process had had a number of problems and that the APPs being submitted were not necessarily compliant with the NT requirements. To deal with these anomalies, the Authority had been working with the technical team from NT, to revive the APPs for this current financial year, and was writing up the legislative sections, situational analysis and other areas of the APPs. That work was extensive. In the meantime, there was also a need to look at the strategic plan of SASSETA and make sure that the objectives spoke to the function of SASSETA. That document was about to be finalised for submission to the Department and for tabling.

Some of the issues that were addressed were looking into the programme budget structure. The document to be submitted to the Minister proposed that SASSETA be realigned into three very clear programme structures. The budget had also been revised to make sure that it was completely compliant with the requirements of the Skills Development Act. The APP was being properly costed. The report would be sent to the Department.

The Skills Plan that was submitted was also being reviewed. It required extensive overhaul, because there was a lot in the Skills Plan that did not speak to the security sector but spoke to other sectors. Problems regarding general governance, and the way in which decisions were made, were being identified. Often, decisions were made informally. There were thus challenges around paying money on contracts that were not properly or formerly signed.

She also mentioned the ways in which these identified problems were being addressed, and said the following initiatives were under way: 
- Irregular expenditure processes have been established, and a number of contracts are currently under investigation
- Reformatting of the contracting documentation and processing is underway
- A complete overhaul of all other policies and procedures is underway

- Financial controls and monitoring systems are being put in place

- A moratorium has been placed on the appointment of all non-critical posts pending an investigation into appointments and a review of the organisational design and appointment procedures
- A Monitoring and Evaluation framework is being developed. (A plan will be developed and implemented linked to this framework)
- A review of all IT and document management processes is currently being completed
- A turnaround plan for the issuing of certificates has been developed and is being implemented
- An effective risk plan for SASSETA is being developed
- Engagements have been held with a variety of stakeholders
- Procedures have also been put in place to ensure that learner and student concerns are properly addressed
- A security assessment, including both the physical and information security, is being conducted
- The chamber establishment is being reviewed.

Ms Irish-Qhobosheane finally noted that, given the current situation within SASSETA, an administration team had been appointed to assist the Administrators. This team included a financial expert, a legal expert, a technical expert on corporate affairs, a SETA expert.

In addition, a National Treasury GTAC team had agreed to provide assistance to the Administrator on the areas of:

• SCM policies and procedures
• Planning and monitoring
• Performance
• IT expertise

She remarked that during the first six weeks of the Administrators appointment, the bulk of the Administrator's time was taken up dealing with crisis management due to the complete absence and collapse of processes within the body

Department of Higher Education and Training comment

Mr Maliviwe Lumka, Chief Director: SETA Coordination, Department of Higher Education and Training, added the input of the Department as requested by the Chairperson. He wanted to stress that the placing of the SASSETA under administration was the result of several evolving events. In 2011, when SASSETA was established, it already received a qualified audit certificate from the AGSA, with many findings. To SASSETA's credit, an investigation was held, and some officials were dismissed. However, the problem did not go away, because the following year SASSETA got a qualified audit opinion with repeat findings from the previous financial year. The Minister became concerned and in early 2014, the Minister wrote to the Board asking the Board to present a turnaround strategy.

He noted that the performance of SASSETA last year was around 34% only. Most of the AGSA findings had already been indicated by the Administrator, and these included issues of irregularity around the employer grant and project expenditure, procurement and contract management, the financial performance and the weak functioning of the audit committee, as well as lack of poor controls within SASSETA and fraud around the discretionary grant. When the Board failed to come up with a turnaround strategy, the Minister was left with no other option but to place SASSETA under Administration.

Mr Theuns Tredoux, Chief Financial Officer, DHET, added that there were some serious concerns from the Committee, and that resulted in the process of Administration for the SETA. He offered some word of caution for the 2014/15 financial year, especially given that the AG had already identified quite a number of misstatements and irregularities.

Discussion

Ms J Kilian remarked that the presentation was disconcerting in the picture it presented. Some entities perhaps might not be performing because of lack of skills, but it must also be noted that in many cases there was the opportunity to improve; the NT and AGSA would be willing to give the necessary support. It unfortunately appeared that in some cases, those controlling funds were merely feathering their own nests. The management team were aware that Board members had due responsibilities. When presenting before Parliament, the evidence was placed on record and serious consequences could follow if the management team did not convey a comprehensive picture of what was happening at SASSETA, including individuals being charged for giving false reports.

She believed that it would be a wasteful exercise to go into the details and history of the Annual Performance Plan (APP) - it seemed to set out wonderful plans but, as the Auditor-General (AG) had found, few measurable targets. She wanted to know how SASSETA had over committed itself and why, after repeat findings from the AGSA  it still did not institute the right system and control measures such as the Public Finance Management Act (PFMA) and National Treasury regulations. The PFMA was also very clear on penalties and fines, including imprisonments, that could follow for Boards and entities that did not comply. She also wanted to know if there was any training for those Board members and if they were aware of the very serious consequences in that regard. She also enquired if there was anything members of SASSETA would like to present on how they landed in the mess .

Mr E Siwela (ANC) wondered whether it was worth discussing the APP since the Administrator said it was under review. A revised strategic plan would be presented to the Committee, and he did not think it was worth taking matters further until then.

Dr B Bozzoli (DA) suggested that the Committee reject the documents being presented. She further suggested that the Committee discussed the fact that SASSETA was under Administration, and wanted to know why the CEO was in place, and whether anyone else had been or would be suspended or removed.

Dr Bozzoli asked if the forensic audit was being undertaken and, if so, the outcome of that. She suggested that quarterly reports were needed on the re-vamped APP. She queried the discretionary grant system, which seemed to be an open invitation for people to misuse the money, particularly since there appeared to be minimal rules as to the distribution of these grants and she recommended that the Committee should propose that no discretionary grants should be permitted in any organisation that was under this Committee's oversight. All grants should be defined in terms of what they were intended for, be regulated and any distributions done through a formal process.

Ms M Nkadimeng (ANC) also suggested that the Committee not consider this APP, but allow the Administrators to complete the review as stated in the presentation. She asked around the area of compliance with PFMA and NT policies. There was a Chief Financial Officer and the Board, so she enquired what the reasons were for non-compliance with financial management prescripts and policies. She said that entities needed to come with further progress reports on how the fraud issue would be addressed.

Ms Irish-Qhobosheane pointed out that there had been a forensic audit done in the body. The audit covered different areas and they gave a relatively comprehensive picture. There were some pertinent issues that had been raised in those audits and investigations were also ongoing, after which it was possible that some people may be criminally charged. It was not possible to say who might be going to be suspended at this point.

She said she would look into the question of a quarterly report. The Board had rushed to put through the contracts shortly before the Board was put under administration, knowing full well that this was about to happen, and it had created other problems for other commitments of the body.

She explained the manner in which the discretionary fund was administered, confirming that there had been no financial approval done before the funds were allocated, so that the previous administration had merely allocated funding without checking with the CFO or going through bidding adjudication committees, after being through an evaluation committee. As a result people were allocating funds that the entity did not have. There had also been an absence of understandable financial reporting, and she stressed that any proper financial reports would not only give the accounting authority and the senior managers an understanding of where they were over spending or under spending, but also assist the Department in terms of planning and expenditure.  She maintained that there did appear to have been some irregularities, and there could also be pointers to fraud in the over-commitments. That was why certain contracts had been cancelled. In terms of the Gazette notice, the Board was suspended, and when she was brought in, the Board had been disbanded as the accounting authority. She had referred the matters to the Department.

She clarified that even though the word "discretionary" was used for the fund, which did not mean that it falls outside the PFMA. It still required proper procedure and processes to be in place. Those were now being put in place, as well as proper rules around how contracts are awarded and what is the evaluation process. There was no suggestion that a person could simply use his or her discretion as such.

Departmental response

Mr Maliviwe Lumka responded that in terms of the Skills Development Act, the Department basically oversaw or looked at any problems from a distance, because an Administrator was appointed in terms of specific terms of reference, and had to look at what the problems were, and review the appointment and conditions of service of the entire official structure within the SASSETA. There was no specification that the CEO must or must not be there, and that would be the prerogative of the Administrators. Governance was clearly awry, and that was why the Administrator was put in place; to change things. The issue of discretionary grants was governed by the PFMA - and it was 20% paid to employer, and 80% had to go to pivotal programmes which were a part of the training that leads to full qualification.

Ms Moroka explained why she was present at the meeting. She had been dismissed in January 2014, but took the matter to the Commission for Conciliation, Mediation and Arbitration, which confirmed that her dismissal had been unfair. She was reinstated on 1 November. From her discussions with the Chief Financial Officer, she discovered that there had been some over commitments, which were raised with the Board. Under the law, it was required of the CEO that she raise an early warning, and that was why she had done so. The Administrator was then brought in.

The Chief Financial Officer confirmed that there had been reporting to the committees of the Board on the financial status of the organisation. However, there was disagreement on the status and as to exactly where the organisation was, which then led to over-commitment. A particular party wanted approval of further contracts which would lead to the over-commitment of the body. Other parties believed that this should not be the case. Eventually there was over-commitment. In relation to the non compliance, there was a challenge, where the budget was operated from the finance budget but some of the projects being implemented were not in terms of the fixed cost module, which led to those projects being irregular expenditure. Some of the non-compliance related to the documents that were prepared in the previous financial year when the organisation’s audit was still qualified. National Treasury noted that if payments were still being made under those contracts, it would be reported as irregular.

The Chairperson stated that the Department's oversight was not effective enough. The Department needed to intensify its oversight function.

Dr B Bozzoli asked whether the Department has a reliable figure of the training needs in the different sectors. This was important to determine whether the SETAs were really making an impact and how such impacts were measured. On training, she stressed that it was meaningless for the Department to be training those who are corrupt.

Mr Lumka responded that from the White Paper, it was clear that if there was no emphasis on research there was no way the Department will be able to know what skills were required for the country. The White Paper thus proposed that a Centralized Panning Unit must be established within the Department. Currently the Department relied on SETAs providing the sector skills plans, and the Department has identified some gaps in those.

The stop gap measure that the Minister had come up with was that there must be a panel that was going to analyse all the sector skills plans, a panel had been appointed, and all the plans, sector, annual and strategic, of all SETAs would be evaluated. It would start by June.

Culture, Arts, Tourism, Hospitality and Sport Education and Training Authority (CATHSSETA) briefing

Mr Pumzile Kedama, Administrator of CATHSSETA, gave an overview of the Strategic Plan and 2015/16 APP. He gave the contextual background to the reason why CATHSSETA went into Administration; this body had been facing challenges of consistently not meeting its predetermined objectives. There had been serious allegations made against some Board members and senior management. The Board commissioned Grant Thornton to investigate the allegations and make recommendations. However, the Board could not act on the findings, due to the differences of interpretation between this body and the Board, and internally. The Minister instructed the Board to resolve the challenges. However, in-fighting within the Board affected the performance of the organisation wherein the targets were not met on a quarterly basis. For the Financial Year 2013/14, CATHSSETA received a qualified audit opinion with matters of emphasis. Due to its dysfunctionality, the Minister instructed the Director General of DHET to put the SETA under administration. An Administrator was appointed on 16 October 2014 to take over as the Accounting Authority for CATHSSETA.

He highlighted the Achievements of the first five months of his administration. He stated that his approach to turning CATHSSETA around was to conduct an organisational diagnosis and analysis. Emanating from that were some actions taken.  He concluded outstanding disciplinary cases and reviewed contracts. He also instituted disciplinary action against the CEO and CFO, which led to their suspension. There was a development of the Strategic Plan and APP with revisions. He also revised the high level plan for the institution's turnaround, with inputs from the diagnosis report. Other achievements were that the 2013/14 AGM was held, he established an interim governance structures for Remco and joint working committees. He also changed the window, so that the first quarter of 2015/16 targets were to be implemented in the fourth quarter 2014/15, and aligned the resources to address immediate performance issues to achieve targets.

He further remarked that the strategic direction led to the revision of the Strategic plan and APP. The number of programmes was reduced from 17 to four, to improve focus. The four programmes now were Administration; Corporate Governance; Planning; and Skills Development, to ensure alignment to National Treasury guidelines.

He highlighted the five years strategic objectives of the body. Programme 1 focused on Administration, to enable CATHSSETA deliver on its mandate by providing leadership, sound financial management, organisational management, and administrative support. He described the sub-programmes (see attached presentation for full details). For this particular programme, the five year Strategic Objectives were to comply with Supply Chain performance imperatives, comply with financial performance imperatives, create an environment that enabled performance, comply with Occupational Health and Safety Act,  promote CATHSSETA to stakeholders, strengthen the CATHSSETA brand and  ensure ICT system availability.

Programme 2 focused on governance and the purpose was to enable CATHSSETA to deliver on its mandate, through the provision of corporate governance support services that ensured accountability. The programme was made up of the Board services, Office of the CEO and Accounting Authority structures. The five year strategic objectives were to achieve special projects milestones, ensure good governance at the CATHSSETA, comply with applicable legal imperatives, minimise the impact of risk, resolve audit findings within agreed times, achieve predetermined strategic objectives, comply with corporate governance imperatives and achieve customer satisfaction.

Programme 3 was based on planning. The purpose was to provide performance information services that informed management decision making that would lead to the achievement of the CATHSSETA predetermined strategic objectives. This programme was made up of the Research unit, Strategy and APP unit, Monitoring and Reporting unit and the Evaluation unit. The strategic objectives of this programme were to commission CATHSSETA sector research, submit strategy performance reports to the Department and improve the impact of strategy planning services within CATHSSETA.

Programme 4 looked at skills development and was intended to facilitate the delivery of the CATHSSETA core mandate of skills development in the CATHSSETA sector. This programme was made up of the five sub-programmes for Quality Assurance, Learning Interventions and Grants, Special programmes, Provincial Operations and Chambers. The programme intended to build qualifications that were fit for purpose, improve training provider compliance with legislated requirements, improve the capacity of TVET Colleges to deliver skills development interventions, increase the number of learners enrolled in PIVOTAL programmes, implement sector skills development plans,  contribute to skills development in the public sector within the CATHSSETA sector, improve the payment of Mandatory grants and increase support to sectorial small business organisations.

The budget details were indicated in the presentation. (See attached document).

He highlighted the strategic challenges facing CATHSSETA. He said that there were a significant number of (service) providers in the sector who were urban based in spite of rural areas contribution (conservation 63%, gaming and lotteries 27%, hospitality 29%). Furthermore, the levy income was minimal relative to the actual demand for skills across the sectors. Besides this, 90% of CATHSSETA registered enterprises were small and many were exempted from paying skills levy. The organisation serviced a large number of smaller enterprises with limited income from few larger enterprises.

This limited income impacted negatively on CATHSSETA. There was a wide and diverse sector dependent on a variety of occupations (qualifications). There was no provincial footprint, and there were poorly managed business contracts. There was also inability to match service delivery and financial challenges, as well as to deliver consistent compliance with governance imperatives.

Discussion
Mr Siwela noted that the Administrator would come in when there was a problem with an organisation, and suggested that when this happened, people would tend to "run away from" disciplinary measures, so asked how these were instituted, whether cases were simply closed if they left.

Mr Siwela asked for more information on the bursaries granted to the children of Board members, saying this was an unfortunate development and an anomaly, and asked whether, because it had already happened, the Administrator was intending to recover the money awarded to those children; whether it was irregular payment, or whether it would accept responsibility for helping those individuals to acquire skills.

Mr Siwela asked how the presence was going to be felt in the rural areas, and if the Administrator would ensure people in the rural community benefitted from the organisation's services.

Dr Bozzoli asked what the main problems were that the Administrator found in CATHSSETA. She wanted to know what had happened to the Board, and whether it has been suspended, and also what was done about those who saw CATHSSETA going down before being put under Administration, and what consequences had been or would be imposed. She asked if there was a benchmark for the proportion between skills development expenditure and expenditure overhead administrative costs.

Ms Nkadimeng noted that the allegation of corruption was an indication that the supply chain management policies were not implemented accordingly. That had encouraged these criminal activities. She asked how many employees were fingered in the forensic reports as involved in the criminal activities. She noted that CATHSSETA plans to establish provincial offices for Western Cape, Eastern Cape, KZN, Northern Cape for 2015/16, and asked what informed the selection of those provinces in the current financial year.

Ms Kilian asked the Administrator if he had discovered any latent irregularities, contracts not going through the necessary processes, or supply chain management issues. She also wanted to know the consequences for those found to have transgressed the law. Relating to the particular task, she asked if there was any relevant information that should be communicated to the Committee with regard to reconfiguration of CATHSSETA environment.

Mr Kedama, Administrator, responded that the cases were now closed internally, but there were forensic investigations that had just commenced. Any person implicated was not "off the hook" but the law must take its course. In relation to the bursaries, he had identified that not all the correct governance procedures were followed and implemented. All members of the organisation, from Board to the lower level, were expected to disclose their interest and there was an ongoing investigation into the extent to which the Board members were personally involved in that process. Where there were no disclosures, necessary measures would be taken. It was work in progress.

The work going on in the rural areas was being executed by providers that were urban based. In those particular rural areas, there were no skills to respond to those needs. There was now a deliberate approach to focus on rural development related projects in all of the sub-sectors.

He confirmed that there were issues of non-compliance at the governance level, including financial mismanagement.  For instance there was an HR policythat stipulated that advertisements were to be placed locally, before going to external advertisement, but to a large extent that had not happened. The Board was disbanded by virtue of the organisation being put under Administration, so the Board was no longer in existence. Some of the investigations included everyone in the organisation.

Blatant irregularities were found in contracts awarded without following the due processes. For instance, there might be a proposal that started with a R4 million figure, but in the following year, without any explanation nor variation process, it escalated to R8 million. Certain specific employees had joined the organisation by virtue of their relationship with the CEO.  The immediate challenge was to provide evidence where disciplinary action was to be instituted. Information was quite lacking in the organisation.

The intention is to have Provincial offices in all the provinces but, given the limited resources, it would be done in stages. The entity was also looking at how its stakeholders were spread across the Provinces.

On the legislative changes, he stated that in the short period of time he had been at the helm of affairs, the main problem had been with governance, and identifying where the Board had a major role to play as opposed to overseeing. It translated to the level where the Board had become operational. The issue of governance needed to be looked at, including the size and role of the Board, as well as the powers of the CEO. The role of the Department and the interface between the CEO directly with the Department also required work, because if there was a situation where the CEO and Management did not agree with the Board on certain things, but the Board claimed to be directing, and if the CEO cannot interface with the Department to raise those issues, there would be problems.

Mr Maliviwe Lumka said that the Department was currently busy with legislative changes.  The Minister had made significant progress. The Department identified the problem early on, but the legal process had to be followed, and again, he stressed that the Department had been able to identify the details only when the Administrator was in office.

Dr Bozzoli noted that there has been a repeat of the same kind of conduct without having the necessary system in place to prevent that. She asked about the Department's ability to check on issues of appointment of service providers, with links to ID numbers and people employed by the state or semi-state institutions. She questioned whether the Department was following up on that.

Mr Siwela asked if the Administrator would, in the future, consider any other means to disburse these bursaries.

The Administrator responded that CATHSSETA had signed a memorandum with National Students Financial Aid Scheme (NSFAS) who would be disbursing the bursaries in future. CATHSSETA did not directly allocate bursaries to learners.

Mr Theuns Tredoux, Chief Financial Officer, DHET, noted that some of the concerns were already dealt with in terms of legislation linked to PFMA and National Treasury regulations. He suggested that the Department should have a workshop with the Committee on the new landscape, so that the relevant inputs could be obtained from the Committee.

The Chairperson remarked that that the impact of CATHSSETA being under administration was that it created the impression that the body responsible for skills development was not doing its job. Individual interests appeared to have been above organisational interests in these cases. She congratulated the administrators for the trust that the Minister had placed in them, and asked that they not disappoint the Minister and South Africa. People were aware there were skills gap in South Africa and these bodies needed to represent government well and properly, with full adherence to law. It was the responsibility of the DHET to ensure that the new Board appointed would have the best interest of the organisation at heard.

She noted that she expected the Administrator to review the performance indicators and targets that did not meet the needs criteria, and this should be the main focus of improvement. She also reminded the Administrators of accountability, in terms of monthly and quarterly reports which would then trigger a move from the Committee to do its oversight function. She also reminded the DHET of its oversight responsibilities.

The meeting was adjourned.