National Skills Fund & MerSETA implementation Audit Action Plans to address 2022/23 audit findings

Meeting report

The Committee Secretariat informed the Chairperson that apologies had been received from Minister Blade Nzimande, the Director General (DG), and the two Deputy Directors-General (DDGs).

The Chairperson presented the agenda for the meeting which included presentations by the National Skills Fund (NSF) on the implementation of its audit action plan to address the 2022/23 audit findings, as well as by MerSETA on its progress in implementing the audit action plan to address the same audit findings, including updates on the forensic investigation reports. The Chairperson mentioned uncertainty regarding the departmental leadership and suggested that the NSF colleagues lead the discussion unless someone else is designated.

National Skills Fund Audit Action Plan Implementation Update

Overview

Mr Zukile Mvalo, Deputy Director-General: Skills Development, Department of Higher Education and Training (DHET), outlined that the focus of the meeting is on two entities of the DHET, both of which fall under Schedule 3A of the Public Finance Management Act (PFMA) and the Skills Development Act. Mr Mvalo indicated that the meeting will commence with discussions on the NSF.

He provided an overview of the areas to be addressed during the discussion, highlighting the findings of the Auditor-General South Africa (AG) in various areas such as finance, planning instruments, and human resources. Mr  Mvalo detailed the progress made in addressing these findings, including completion rates and ongoing efforts. He particularly emphasised the importance of human resources capacity within the NSF and provided a status report on senior management posts.

Further, Mr Mvalo mentioned the focus on forensic investigation, noting the progress made since the investigation, and highlighted ongoing efforts to address audit action plans. He mentioned the Department's quarterly meetings with the entities to monitor progress in implementing audit findings, focusing on areas such as annual financial statements, performance information, and compliance with laws and regulations.

Financial Progress

Mr Zama Kubheka, Chief Financial Officer (CFO), NSF, proceeded to discuss the findings of the AG regarding finance, categorising them into material and other findings. He noted that while progress had been made in addressing most of the findings, some were still in progress due to internal control deficiencies identified by the AG. He highlighted a specific unresolved finding related to provisions from a previous audit report.

He then delved into the details of the qualification areas in the audit report, including skills development expenditure, provisions, financing from advance payments, infrastructure, and trade receivables for non-exchange discounting in the presentation. Mr Kubheka outlined the steps taken to address each qualification area, such as appointing champions, establishing business processes, and improving documentation and review procedures.

He mentioned the importance of tracking corrective measures and ensuring compliance with accounting standards, particularly regarding discounting receivables and provision calculation. Mr Kubheka also discussed efforts to automate processes, improve documentation storage, and enhance internal controls to prevent the recurrence of issues identified by the AG.

Regarding consequence management for irregular expenditure, Mr Kubheka explained the internal audit process and its transfer to the financial management and planning function under the Office of the CFO for oversight and reporting.

Mr Kubheka thanked the Committee for the opportunity to present the NSF's financial report and assured them of ongoing efforts to address the AG's findings and improve financial management practices.

Human Resources Update

Mr David Mabusela, Acting Chief Executive Officer (CEO), NSF, provided an update on filling vacancies within the HR unit. He stated that out of the 47 vacancies, 19 positions were currently at the verification stage, where administrative checks were being conducted to confirm qualifications and other details. Additionally, four positions were at the shortlisting stage, 28 at the interview stage, and 12 submissions had been made. Ten appointments have already been made.

He then detailed the status of senior management posts, indicating that processes for all positions had been completed up to the submission stage for actual appointments. Notably, the Director of ICT had been appointed to lead the establishment of the IT platform within the NSF.

Mr Mabusela provided further disaggregated data on the posts at various stages of verification, shortlisting, and interviews, as well as those that had been completed and were awaiting final approval for appointments. He concluded by announcing that a total of 10 vacancies had been filled from 1 April to the present.

Organisational Performance Update

Ms Melissa Erra, Chief Director: Strategy, Innovation, and Organisational Performance, NSF, proceeded to provide an overview of the key actions undertaken by the NSF management to address organisational performance issues and implement the strategic plan and annual performance plan for the period 2022-2023. She highlighted interventions and controls introduced through the audit action plan, emphasising the ongoing testing and strengthening of these measures.

Regarding organisational performance reporting, Ms Erra mentioned ten findings mainly related to the annual performance plan and strategic plan. These findings included issues with the classification, overstatement, and understatement of achievements, as well as inconsistency and reliability of information. She outlined the actions taken to address these findings, including reviewing planning processes, ensuring compliance with performance frameworks, and automating information for accessibility.

Eight of the ten findings were addressed, primarily related to the annual performance plan. Control interventions such as developing lead schedules and introducing quality assurance units were implemented to ensure the accuracy and reliability of reported information. Additionally, efforts were made to resolve challenges related to beneficiary records and project documentation storage.

Ms Erra provided updates on the resolution of findings, including verifying learner and non-learner records, and the progress made in addressing exceptions identified through performance testing. She mentioned ongoing collaborations with the Department of Home Affairs (DHA) to address data exchange protocols and highlighted remaining challenges related to sector duplication.’

Skills Development Implementation

Ms Meriam Malebo, Acting Chief Director: Skills Development Implementation, NSF, discussed findings related to skills development implementation, particularly concerning legacy programs. She noted that there were eight findings in this area and explained that ongoing internal reviews were being conducted to ensure compliance and accuracy in preparation for the interim audit.

Ms Malebo highlighted the implementation of a pilot quality assurance function, within skills development to verify and review all underlying source documents linked to performance information and financial expenditure. This initiative aimed to confirm the accuracy, completeness, validity, and reliability of data. She mentioned that over 27 000 records had been reviewed to date, and efforts were being made to address incorrect classifications and limitations of scope.

Regarding reliability findings, Ms Malebo emphasised validating each document linked to beneficiaries to ensure accuracy and completeness for AG review. Collaboration with different directorates within NSF was stressed to ensure a common understanding of submitted documents. The use of OneDrive for document storage was mentioned, with assurance given that accessibility and challenges faced in the prior year had been addressed.

Ms Malebo moved on to discuss skills development funding, indicating that all findings in this area were marked in orange due to limitations in underlying source documents. Internal auditors were tasked with reviewing and testing control measures to address these findings, with the aim of achieving compliance.

In conclusion, Ms Malebo reiterated the importance of the pilot quality assurance function in improving operational efficiencies and ensuring data accuracy. She mentioned ongoing engagement with stakeholders to gather information on legacy programs and the efforts to close remaining gaps in compliance.

(See attached for full presentation)

Presentation by merSETA

The Chairperson expressed that the NSF's presentation had exceeded the allocated time by almost 30 minutes. Despite recognising the challenges faced by the NSF, she allowed it to continue to ensure it adequately conveyed its progress. However, she appealed to MerSETA to be mindful of time constraints, emphasising that it was allotted 30 minutes for its presentation. While she was willing to extend the time slightly, she urged MerSETA to remain conscious of the schedule.

Ms Kate Moloto, Chairperson of the Board, MerSETA, introduced the MerSETA team members present, including deputy chairs and executive officers, and outlined the agenda, which focused on forensic investigations, progress on the audit action plan, and consequence management.

Regarding forensic audits, Ms Moloto detailed two whistleblowing reports received in December 2021 and September 2022, which led to the suspension of the CEO and Senior Manager of program implementation. The investigations implicated former and current Board Members and staff. She highlighted that those investigations had been concluded with no basis for allegations against one current Board Member and reported criminal cases opened against those implicated.

Concerning the CEO and Chief Operations Officer (COO), Ms Moloto explained their precautionary suspensions and the progress of disciplinary hearings. Despite delays, disciplinary measures were implemented, including unpaid leave for the CEO during a requested postponement.

Ms Moloto emphasised MerSETA's commitment to addressing these issues promptly and transparently, ensuring a rigorous approach to accountability and consequence management. She then handed over to Mr Jock to address staff-related matters, reaffirming MerSETA's dedication to managing these challenges effectively.

Forensic Investigations Report and Recommendations

Mr Rajesh Jock, Corporate Services Executive, MerSETA, provided updates on eight individuals implicated in forensic reports.

Regarding the former senior manager of program implementation, who resigned in August 2022, MerSETA pursued legal action to preserve his pension fund and reported the matter to the Hawks.

The client liaison officer in Mpumalanga resigned before the hearing, and based on legal advice, no further litigation was considered against her.

The acting executive for strategy and research resigned in June 2023, following a review by legal advisors and no further disciplinary action has been taken.

The legal and compliance manager was cleared of allegations after a legal opinion, and the matter was closed.

The client relations manager in Mpumalanga faced delays due to medical reasons but was found guilty in January 2024 and dismissed.

The IT coordinator's charges were delayed due to involvement in the CEO's matter, but proceedings are now underway.

Mr Jock summarised each case's status and emphasised pursuing criminal and civil proceedings against implicated individuals. Moreover, conflicts of interest involving current and former employees conducting business with MerSETA were investigated, resulting in probity checks and ongoing probity processes.

Progress on the merSETA Audit Action Plan

Ms Khumo Mzozoyana, Chairperson: Audit and Risk Committee (ARC), MerSETA, provided an overview of the audit findings across three categories: annual financial statements, performance information, and compliance with laws and regulations.

She highlighted the efforts to strengthen processes, such as digital payments and reporting, recording of accruals, internal controls for grant management, and compliance procedures. Measures were implemented to improve documentation, quality control, and training to enhance compliance.

Ms Mzozoyana emphasised the reinforcement of financial management by bringing in additional resources and extending the terms of reference for internal audit to play a more proactive role in ensuring checks and balances.

She concluded by expressing the commitment to further strengthening processes to improve audit findings and handed over to the CFO to provide more detailed insights.

Audit Findings Action Plan (Summary)

Mr Andrew Venter, Acting CFO, merSETA, summarised the findings into nine areas:

• Understatement of accruals, leading to an overstatement of commitments in financial statements. Corrective actions include implementing standard operating procedures and restating prior accruals.
• Expired contracts, with ongoing efforts to close or amend contracts to ensure compliance.
• Challenges in reporting prior achievements, capturing errors, and incorrect indicators in the Internet Protocol area. Corrective actions include updating standard operating procedures, training staff, and amending performance contracts.
• Consequence management is ongoing.
• Document management improvements include creating SharePoint folders and staff training.
• Streamlining of Director-General approvals and verifications processes.
• Irregular expenditure issues addressed through software corrections, training, and updating of procedures.
• Rectification of differences in commitment region sub-schedules and contract management improvements.
• Disclosures in annual financial statements reviewed and updated, with ongoing training and meetings to ensure compliance.

Mr Venter concluded by mentioning ongoing disciplinary actions against implicated senior managers and efforts to strengthen financial control systems, including legal actions to reclaim lost funds.

(See attached for full presentation)

Ms Moloto asked the acting COO to provide additional remarks (not included in the presentation).

Additional notes

Mr Naphtaly Mokgotsane, Acting COO, merSETA, provided an overview of key projects aimed at improving the performance of merSETA:

The EON Knowledge Metaverse (EKM) Program: MerSETA has partnered with the EKM Programme to provide 57 000 licenses for virtual reality and augmented reality tools. These licenses are intended for use by Technical and Vocational Education and Training (TVET) colleges and skill development providers to enhance their training programs.

Understanding Provincial Government Skills Needs: MerSETA has collaborated with provincial governments to understand their specific skills needs. For example:

• In Free State, MerSETA partnered with the provincial government to support over 2 000 learners and provide additional funding for student debt completion bursaries.
• Gauteng is supporting 11 technical high schools to feed into artisan programs, along with assisting 5 000 learners.

Northern Cape, KwaZulu Natal, Limpopo, Eastern Cape, and Northwest provinces are also supported through various skills programs, learnerships, bursaries, and technical high school initiatives.

Support for Artisan Programs: In provinces like Northern Cape, Limpopo, and Eastern Cape, MerSETA is directly supporting artisan programs and learnerships. This support includes assistance for around 950 learners in Limpopo and over 2 400 learners in the Eastern Cape.

Candidacy Program: In the Northwest province, MerSETA is supporting four engineering graduates through a candidacy program. This program aims to provide necessary training and development for these graduates to become certified engineers.

Remarks on the presentation by DHET

Mr Mvalo expressed his appreciation to the chairperson, the team, including his colleagues from the Accounting Authority Board, officials, and NSF representatives for their contributions to the productive session. He emphasised the importance of completing most of the work by the end of the financial year on 31 March 2024, to facilitate a smooth closure and preparation for the AGs auditing process.

Discussion

Ms N Chirwa (EFF) expressed concerns about ethical behaviour and processes at MerSETA, emphasising the need for preventative measures to avoid similar issues in the future. She sought clarification on how the organisation plans to address worker and institutional wellness and transparency systems. She commended MerSETA for opening criminal cases in response to corruption, emphasising the importance of dealing with such cases through the legal system. Additionally, she requested the NSF to provide reasons for the lack of evidence regarding skills development funding and queried discrepancies in TVET infrastructure funding. Lastly, she sought clarification on the type and extent of support provided to students and youth in various provinces.

Ms D Sibiya (ANC) sought elaboration on the current status of the WebBook review by internal audit at NSF. She inquired about the status of the internal audit staff's determination test for prior years' irregular expenditure, which had a completion date of the end of February 2024.

Concerning MerSETA, Ms Sibiya expressed worry about the resignations of employees. She questioned the legitimacy of an independent legal opinion that suggested nothing could be done by MerSETA if an employee resigned after not being found guilty. She found this legal opinion suspicious and implied that something might be questionable about the circumstances leading to an employee's resignation.

Mr T Letsie (ANC) said he would lighten the mood by commenting on Ms Chirwa's calm demeanour and commendable speaking skills, expressing his preference for her speaking style.

This light-hearted comment elicited laughter.

The Chairperson intervened to remind everyone to maintain decorum and behave as they would in a formal Committee meeting.

Mr Letsie, despite his initial intention not to speak on the MerSETA presentation, said he felt compelled to address certain issues. He began by acknowledging the progress made since the last meeting in November 2023. He requested updates on forensic investigations and urged for the sharing of the report with the Committee by 28 March 2024, along with details on litigation costs.

He also sought clarification on why disciplinary actions were placed on hold for the ICT coordinator and requested timeframes for concluding the implementation of the audit action plan. Mr Letsie recommended compiling a report listing all individuals who had been dismissed, found guilty, or resigned, including their positions, allegations, and disciplinary outcomes, to be submitted to the Department Head, specifically the DDG of skills development.

Expressing concern about individuals engaged in unethical behaviour moving between SETAs, he proposed that all SETAs provide reports on employees who have left, detailing reasons for departure and any ongoing investigations, to prevent the hiring of corrupt individuals elsewhere. He emphasised the importance of transparency and requested access to legal opinions or reports clearing board members of conflict-of-interest allegations, to ensure impartiality.

Then he proceeded to address the NSF, recalling the state of disarray it was in when they arrived in 2019, with numerous meetings held to address various issues, including the R5 billion scandal. Despite past challenges, he acknowledged the progress made by NSF under the current leadership, attributing it to the CEO and colleagues who brought stability to the entity. However, he expressed ongoing concerns, particularly regarding the high vacancy rate and the prolonged Hollywood arrangement. While he welcomed the progress in filling vacancies, he urged for further action to expedite the process, empathising with the challenges faced by the acting CEO. He emphasised the importance of addressing the high vacancy rate at NSF without delay.

Mr Letsie commended the NSF for its commendable work, acknowledging the positive strides made. Despite expressing reservations about the internal processes for addressing social challenges, particularly related to youth Not in Education, Employment, or Training (NEET), he stressed the NSF's potential to have a more significant impact in resolving the country's unemployment issues. Referring to statistics indicating a high unemployment rate, he urged the NSF to target specific groups, such as those with matric and below, to provide training and skills development opportunities. He proposed collaboration with industries and TVET institutions, citing an example of enrolling unemployed youth from rural areas into programs aligned with local industries, like mechanical training in regions with automotive manufacturing plants such as Volkswagen and Mercedes. Mr Letsie emphasised the importance of utilising resources optimally to address the country's unemployment issues. He proposed targeted training initiatives aligned with local industries, such as agricultural training in regions with a strong agricultural presence.

Expressing dissatisfaction with the perceived delay in decision-making processes at NSF, he urged for quicker action to avoid speculation and ensure the timely implementation of projects. He raised concerns about the prolonged recruitment process for project management contracts, seeking clarity on the reasons behind the delay. Additionally, he questioned the progress of capacitating the quality assurance function and the appointment of a project management consultancy, urging the NSF to provide transparent explanations to prevent speculation about their actions.

Mr K Pillay (ANC) raised several concerns regarding the progress and status of various initiatives within the NSF. He expressed concern about the low completion rate of projects and the prolonged recruitment process for positions advertised in August 2023. He sought clarity on the reasons for delays in critical or funded vacancies.

Regarding MerSETA, the status of employees who resign before disciplinary actions are completed, Mr Pillay inquired about the management of forensic investigations involving staff members still employed by the entity and the reasons for the hold on disciplinary action for the ICT coordinator. Lastly, he questioned the reasons behind the majority of actions in the audit action plan being in progress rather than implemented or completed.

Mr B Yabo (ANC) then delved into his concerns about MerSETA, likening its situation to a case study of an environment conducive to delinquency. He questioned the factors that led to such an environment and sought clarification on the steps being taken to rectify it. Mr Yabo proposed the establishment of a register of delinquent public servants to deter unethical conduct and prevent individuals from evading accountability by resigning before investigations are concluded. He emphasised the need for transparency in the resignation process to ensure that accountability follows individuals even after they leave their positions.

Regarding MerSETA's financial management, Mr Yabo expressed concern about the significant irregular expenditure, indicating weaknesses in control mechanisms. He called for improved controls to prevent irregular spending in the future. He doubted that there was an actual plan to mitigate these challenges, as eluded by MerSETA.

Mr Yabo expressed concern about the process outlined by the NSF regarding data exchange with the DHA. He noted that while this initiative is aimed at verifying beneficiaries, it may not effectively address the issue of duplications in the DHET sector. He stressed the need for a comprehensive framework to tackle this problem and prevent the recurrence of duplications in the future. Mr Yabo highlighted the importance of taking decisive action to address the root causes of the issue, rather than simply conducting verification for its own sake. The NSF needs to be extra careful as it once had a R5 billion scandal. He attributed the cause of the scandal to wasteful expenditure caused by oversights of duplication of the NSF beneficiaries.

He also raised concerns about the delays in finalising recruitment processes and the practice of repeatedly advertising tenders, which he viewed as indicative of a flawed procurement system. He called for transparency in these processes and cautioned against allowing them to expire without resolution, which he considered wasteful expenditure. Mr Yabo urged for accountability and explanations for the prolonged delays, emphasising the need to address inefficiencies in government procedures.

Ms J Mananiso (ANC) directed her first question to the DDG, Mr Mvalo, inquiring about the qualifications and suitability of individuals appointed to SETA boards, particularly in the NSF and MerSETA. She sought clarification on the process of appointing champions for audit action plans, asking if they are part of the NSF's organisational structure and if they have defined terms of reference. Additionally, she requested information on the level of authority these champions hold.

Ms Mananiso also addressed the issue of vacancies in the NSF, requesting a program of action outlining the steps to be taken to fill these positions effectively. She emphasised the importance of having a comprehensive plan to achieve the organisation's hiring objectives.

Turning her attention to MerSETA, she expressed concern about the delays in forensic investigations and disciplinary hearings, urging the organisation to provide a detailed programme of action with clear timelines for addressing corruption issues. She also requested information on the monitoring and evaluation sessions related to audit action plans, seeking clarity on the participants' levels and terms of reference.

Ms Mananiso welcomed the focus on internal audit action plans within MerSETA and requested detailed data on provisional skill needs and support initiatives, particularly in specific areas such as hospitality. She also suggested including provisions in the declaration regarding non-performance bonuses to ensure accountability for individuals who fail to meet compliance standards.

The Chairperson began by thanking all Members of the Committee for their comments, questions, and recommendations and emphasised the importance of ensuring that representatives from the NSF and MerSETA had heard and understood the concerns raised by the Members.

She highlighted the significant delay in appointments concerning the project management posts at the NSF, which started in August 2023 and had not been finalised by March 2024. She requested more detailed timelines from the organisations to provide clarity on the progress of various vacancies.

Regarding the quality assurance functions, the Chairperson asked for elaboration on the methods being employed to strengthen these functions.

She acknowledged the progress made by the NSF but stressed the need for continued efforts to achieve greater impact, particularly in providing opportunities for young people Not in Employment, Education, or Training (NEET). The Chairperson encouraged the NSF to maintain high standards and not become complacent.

The Chairperson expressed interest in understanding the effectiveness of the Memorandum of Understanding (MOU) between the NSF and DHA in transferring data for verification purposes.

Transitioning to MerSETA, the Chairperson addressed concerns about the behaviour of representatives during the meeting, emphasising the need for professionalism and respect. She highlighted the importance of stability within the organisation and expressed concern about postponing the hearing for the suspended CEO. Consequence management and accountability were emphasised, with the Chairperson expressing concern about the recycling of problematic individuals within the sector and the lack of accountability for their actions.

Finally, the Chairperson reiterated the requests made by Members for specific data and timelines, emphasising the importance of timely responses. She reminded the organisations of the expectation to provide written responses within seven working days.

The Chairperson then handed over to Mr Mvalo to lead the responses from the NSF and MerSETA, aiming to conclude the session by 12:30.

Responses

DHET

Mr Mvalo appreciated the clear direction provided by the Committee on what needs to be addressed, noting that the Committee not only raises issues but also offers proposals on how to handle them.

He discussed the challenge of employees involved in transgressions moving from one organisation to another within the public service, emphasising the need for a centralised fountain for background checks and verification. Mr Mvalo suggested exploring urgent measures to address this issue, such as creating a database or system for candidate checks.

Regarding prevention measures, he emphasised the importance of proportional actions against individuals involved in maladministration or unethical behaviour. He stressed the need for harsh consequences to deter similar actions in the future and raise awareness within organisations about unethical behaviour and consequences.

Mr Mvalo addressed the qualification and performance monitoring of Accounting Authority Boards, emphasising the need for compliance with the requirements outlined in the National Skills Development Strategy. He explained the process for nominating Board Members, highlighting the importance of representing various interests and demographics, as specified in the relevant legislation.

Mr Mvalo continued by discussing the process of nominating Board Members, highlighting the role of the CEO in inviting nominations from sectors. He mentioned concerns raised by the Minister about the timeline for appointing CEOs after Board appointments and indicated that the Department is examining the relevant legislation to address this issue.

Addressing the problem of duplication, Mr Mvalo mentioned the development of a Learning Management System (LMS) by the MICT SETA to tackle this challenge. He explained that the system, once deployed across sectors, could assist in mitigating duplication issues. However, he emphasised the need for collaboration beyond just the Department, as other parties would be involved.

Regarding integration of systems, Mr Mvalo stressed the importance of aligning the LMS with the Department's own system to ensure a coordinated and integrated approach. He acknowledged the readiness of the MICT SETA to deploy the system but noted that further work would be required, including within the Department itself.

Mr Mvalo concluded by stating that some issues raised would be responded to within the stipulated time frame given by the Portfolio Committee. He then invited the chair of MerSETA, along with the team, to provide responses to the Committee's questions and concerns.

MerSETA

Ms Moloto began by apologising for inadvertently leaving her microphone on and expressed regret for any unintended consequences. She addressed the issue of delinquent staff, emphasising the importance of taking action and acknowledging the impact of forensic investigations on the organisation's operations, including the unexpected qualification of audits.

Ms Moloto outlined steps taken by the organisation to address the situation, including briefing staff about forensic investigations and the qualification of audits and conducting lifestyle audits, which are set to begin in the next financial year. She highlighted the organisation's efforts to conduct thorough background checks on senior appointments, including Google searches and questioning candidates about their previous employment history.

Ms Moloto provided assurance that the portion of the report clearing the Accounting Authority (AA) member would be extracted and shared with the Committee within two working days. She clarified that although there were allegations of association between the AA member and a company owned by someone with a similar surname, investigations revealed no evidence of financial transactions between the AA board member and the company. Additionally, probity checks confirmed no financial ties between the AA member and the company, thus providing clarity on the matter.

Ms Moloto concluded by stating that her colleagues would address additional areas of concern in the order agreed upon, ensuring a comprehensive response to the Committee's queries and comments.

Mr Jock provided a comprehensive overview of the organisation's policies and procedures related to ethical conduct and governance. He highlighted the existence of clear policies such as conflict of interest, ethics and code of conduct, procurement and contracting, whistleblowing, nepotism, gifts and hospitality, and security and information policies. Additionally, he emphasised the importance of regular training sessions and performance appraisals to reinforce ethical behaviour.

Regarding legal opinions and disciplinary actions, Mr Jock explained that legal reviews are conducted independently to determine if there has been a violation of the law, policy, or ethical standards. He mentioned that some employees were cleared through these legal opinions, while others faced disciplinary actions based on justifiable grounds. He also discussed the case of the ICT coordinator, stating that although initially kept as a material witness, charges against the coordinator are now being pursued to strengthen the case against the CEO.

In terms of resignations during disciplinary inquiries, Mr Jock clarified that while employees have the right to resign, investigations may still continue, and actions such as pursuing criminal charges or monetary claims can be taken if warranted. He emphasised the importance of maintaining controls and tightening policies to prevent future misconduct, along with providing ethics training and creating safe channels for reporting concerns.

Mr Jock also addressed concerns about the Board and performance bonuses, stating that disciplinary matters are taken seriously, and performance bonuses are determined based on both individual and organisational performance. He assured the Committee that disciplinary hearings are being actively pursued, with measures in place to prevent unnecessary delays in finalising cases.

Mr Venter addressed concerns about the progress of audit findings, explaining that the audit was finalised only at the end of September 2023. Consequently, actions to address the findings began in October, and efforts have been made to rigorously resolve the issues. He noted that capacity constraints due to acting positions and alternative leave had been addressed by recruiting additional staff to fill key positions and bolster capacity where necessary. Overall, he assured the Committee that actions were in place for all audit findings, and the organisation was working diligently to resolve them.

Mr Mokgotsane clarified a question about student support, explaining that one of the projects involves assisting with student debt. This assistance contributes to addressing barriers to completion by providing support for paying off student debt through the entities involved. Thus, when referring to student debt support, they refer to initiatives aimed at alleviating financial burdens that hinder students from completing their studies.

NSF

Mr Mabusela addressed several questions and concerns raised by the Members. He began by acknowledging and appreciating the feedback provided, stating that they accept it with respect and a teachable spirit. Regarding the evidence to the AG, he explained that the NSF is working on establishing a comprehensive IT system to manage the efficiency and effectiveness of the information received from stakeholders. They have implemented a OneDrive system to grant the AG access to information in specific formats without relying on manual processes.

Mr Mabusela also mentioned that the NSF has stopped tranche payments if stakeholders are not providing satisfactory information. Additionally, he discussed consequence management, stating that it is proceeding well with labour relations processes before instituting any disciplinary actions. He clarified that certain senior management positions were put on hold due to recommendations from a Ministerial testing report, but functions have been devolved to regions in the meantime.

He also highlighted improvements in project initiation and implementation, including decentralisation to regions to expedite processes. Regarding interim posts, interviews are currently ongoing, and efforts are being made to fill vacancies.

Further, Mr Mabusela addressed questions about progress percentages, timelines, recruitment status, data reconciliation, and the submission of management plans for remaining posts. He concluded by stating that they are committed to addressing the issues raised by the Members.

Mr Kubheka responded to several questions raised during the session. Firstly, he addressed the difference between the quarterly report and the financial statements regarding TVET infrastructure expenses, explaining that the discrepancy amounted to around R3 million. He attributed this difference to a lack of proper considerations and adequate reviews during the submission of financial statements. Mr Kubheka noted that the NSF is now implementing preventative controls to address such issues in the future.

Regarding receivables, he stated that this is a disclosure item submitted on a quarterly basis, and internal auditors are currently conducting audits to ensure accuracy.

Responding to concerns about discrepancies between progress percentages, Mr Kubheka explained that while many issues have been addressed, the entity is waiting for the AG’s approval of its internal control measures before finalising reports. Internal audits have shown positive results so far.

Lastly, he discussed the appointment of champions, who are Deputy Director-level officials tasked with reviewing and consolidating information related to financial matters. These champions will streamline the review process and ensure accuracy before submission to higher authorities.

Ms Malebo provided responses to two questions. Firstly, regarding appointing a project management consulting firm, she explained that the NSF has engaged with the Department of Higher Education and Training through the Bid Adjudication Committee (BAC) and Bid Evaluation Committee (BEC) processes. This engagement is ongoing, and it is working towards finalising the appointment of the project management company.

Secondly, Ms Malebo discussed the importance of capacity building for the quality assurance function within the NSF. She emphasised the need to ensure that resources involved in key activities are trained and capable of implementing specific tasks efficiently. Currently, the function is led by an acting Deputy Director, along with six interns who have received training on system utilisation and understanding the requirements of underlying source documents. Capacitation efforts also aim to establish a community of practice across skills development implementation and ensure a common understanding among Directors regarding document submission to the NSF. This focus on capacitation is part of the NSF's transformation strategy to maintain the importance of capacity building while improving the learning environment.

Ms Erra addressed the issue concerning the DHA and the Post-School Education and Training (PSET) duplicate findings. She explained that the findings related to the correctness of beneficiaries' Identification (ID) and personal information and the duplication of PSET data. The DHA is leading the process to address these issues, as coordination among various entities within the agreement is required. Protocols, procedures, and systemic arrangements are currently under discussion, and once documented and signed, the deployment and assurance of that information will be processed accordingly.

Ms Erra also provided assurance regarding internal efforts within the NSF to address duplications. The entity has begun analysing data within the NSF to identify any duplication across projects. Initial reports have identified duplications, often stemming from beneficiaries attending multiple programmes aimed at supporting their self-employment and sustainability. Moreover, the NSF is now reporting all its information to the DHA to incorporate it into the Department's system analysis approach.

Further, collaboration with the Department will continue to automate performance information to reduce human error and ensure accurate data management. Once automation is complete, the DHA linkage will be embedded in the system, pending finalisation of protocols with the Department to manage the sensitivity of personal information and access to the Home Affairs database. These sectoral interventions are planned to be fully implemented once policies are finalised.

Further discussion

Mr Yabo expressed gratitude for the opportunity to address the issue of the independence of forensic investigations. He highlighted concerns about appointing law firms or forensic investigation companies by individuals or entities implicated in wrongdoing, such as boards, councils, or accounting authorities. To address this issue, Mr Yabo recommended empowering the Special Investigating Unit (SIU) or a similar statutory body with an arm's length relationship to conduct independent forensic investigations.

He acknowledged that there may be concerns about the cost implications of engaging the SIU but emphasised the importance of independence in protecting the integrity of investigative processes. Empowering the SIU or a similar body would provide greater assurance of impartiality in uncovering wrongdoing and holding perpetrators accountable. Mr Yabo underscored the need to address the potential conflicts of interest inherent in the current system. He advocated for measures to ensure accountability, integrity, ethical leadership, and independence in forensic audits across all government entities and organs of state.

He concluded by thanking the chair for the opportunity to make this submission and urged that his recommendation be recorded for consideration.

The Chairperson thanked the recommendations and comments made by Members, acknowledging the importance of transparency in addressing challenges. She highlighted the Committee's role in supporting the sector by providing guidance and assistance where needed. The Chairperson thanked colleagues and emphasised the responsibility of the administration to monitor the work of the entities discussed. She expressed hope that the entities would reach the desired level of impact in society.

The Chairperson noted that most of the questions from Members had been answered and requested that any outstanding data be submitted within the next seven working days. She indicated that this information would be attached to the minutes of the meeting. Finally, she concluded the meeting and reminded Committee Members to stay on for the adoption of minutes and announced a few additional matters.

Committee Minutes

Minutes dated 23 February 2024

The Chairperson suggested adding more detail to the minutes. She noted that while the current minutes were a true reflection of the meeting, adding additional content would enhance their quality.

Minutes dated 28 February 2024

The Chairperson mentioned a minor typo on page five and suggested correcting it. She recommended providing more clarity in the minutes about the Department's written responses to questions not addressed during the meeting.

Minutes dated 06 March 2024

The Chairperson proposed clarifying the section on written responses related to leadership details. She suggested specifying what aspects of leadership information were being requested for clarity.

The minutes were duly adopted.

Ad-hoc Matters

The Chairperson announced that the next week's meeting would be held at iThemba LABS in Cape Town and that Members would be collected from their respective locations, and the Legacy Report would be considered during the meeting. Members were encouraged to wear comfortable shoes for the walkabout of iThemba LABS before the meeting. The Chairperson reminded Members to submit any amendments to the Legacy Report by end of the day.

The meeting was adjourned.