House Chairperson, comrades and hon members, as indicated, we have four reports, three of which are for entities and one for a national department. Unfortunately, all three entities whose reports we are presenting had disclaimers and the national department received a qualified audit opinion.
The Energy Sector Education and Training Authority unfortunately has had repeated disclaimers owing to a lack of leadership, both at board and management levels, and a lack of skills. The employment practices are such that they repeatedly and continually employed people who do not have skills. We hope that the department, especially the Minister of Higher Education and Training, will be able to make interventions, as promised during the hearing.
The same applies to the public sector; it is basically the same problem. The disclaimer on the National Student Financial Aid Scheme was more of a technical nature, although there were issues that I believe my colleagues will be able to cover when they come and make interventions. However, all these three entities have disclaimers. The last one is the Department of Defence and Military Veterans. We know that this department has had challenges over the years, but there has been a progressive reduction of issues of qualifications. For the year under review there was a lot of work done by the Secretary for Defence and the chief financial officer, who were employed on 1 April and had to deal with the audits as they came through. From the reports that we see, they were able to do a lot of work to reduce the qualifications to about two.
The two that are remaining are not new qualifications; they are old and persistent qualifications, especially the issue around the management of assets. It is an issue that we are aware of that the department in conjunction with the Auditor-General, are dealing with in trying to find a mechanism and an instrument that can be used for better accounting on these assets.
At the time of the hearing, there were ongoing investigations or, rather, there was going to be a report on the use of consultants in the department. We would be very happy to get that report and to have a sense of the extent to which there is internal capacity to deal with issues or whether it is dependent on external consultants.
In all these reports, House Chairperson, we are calling on the executive authorities to report to the House, within 60 days from today, on the progress that is being made on each of the issues that have been identified so that the recommendations we have made should not just lie there and gather dust. We need to continually have a sense of what is being done.
I am therefore introducing these reports to the House. House Chair, the arrangement is that my comrades in the committee are going to make more detailed inputs on each of these reports. I thank you.
There was no debate.
Declarations of vote:
House Chairperson, as far as the Eseta is concerned, this entity has received a disclaimed opinion - the worst finding possible - and not only for the last financial year but for three years in a row, in fact. It is indeed a very damning report.
The Auditor-General identified some 14 areas in its operations which led to the disclaimer. The autopsy on this body showed multiple causes of death.
The Eseta's mandate is very clear and, to achieve its goals, certain targets were set. However, in many instances it fell far short of its targets; for example, in indicator 2,2 it set itself a target to develop skills in at least 322 small levy-paying firms; it achieved only 24. In indicator 2,5 it set itself a target of annually increasing the number of small BEE firms in receipt of skills training to 70, but achieved nothing, and so it goes on.
The chairperson of the Eseta, in his annual report, also was clearly confused about the role of the Eseta. In fact, it would seem he was writing a piece for the UN or Human Rights Commission when he referred to the newly appointed Minister and Deputy Minister and when said:
It is trusted that the new members will continue our quest to improve the relations of mankind while aiming to create a society endowed with social justice.
Mr Chairperson, this was a consensus report by Scopa and the DA therefore supports it.
Like the Eseta, the Public Service Sector Education and Training Authority, Pseta, is terminally sick, if not already dead. It received the third disclaimed opinion in as many years. The Auditor-General based his finding, inter alia, on the following: documents were not always available to support records; there was irregular expenditure; and there was widespread noncompliance. The Auditor-General was thus unable to make any finding because of the systems mess that this entity presented.
The root cause for the unavailability of documents was lack of proper leadership, and the Auditor-General put it very bluntly in his interaction with Scopa when he said:
Management and staff did not fulfil their duties and responsibilities.
However, don't expect to find any evidence of staff or management having been disciplined for nonperformance in the entity's annual reports.
At least nine instances of noncompliance with the Public Finance Management Act and two of noncompliance with the Skills Development Act are pointed out. This sorry state of affairs did not simply appear overnight. It developed because of wrong appointments, poor leadership, incompetence and negligence. However, trying to find the culprits who caused this disaster is going to be difficult.
There were three CEOs in one year alone and all of them were in an acting capacity; and at least two, if not all three, have since left. The CEO's role was fulfilled by private consultants. This was also a consensus report by Scopa and the DA will therefore support it, although we are of a firm view that the current system of Setas has dismally failed our nation's training needs and should be replaced by a better system.
Chairperson, my time is up, but we also support the other two reports; the Road Traffic Management Corporation report and the report on the Department of Defence and Military Veterans. I thank you. [Applause.
Somlomo, siyiCope sifuna ukuthi kuqala siva buhlungu kakhulu kuba siza kuthetha namalungu, ingakumbi abaPhathiswa bengekho. Besicinga ukuba baza kuba khona bazimamelisise ezi zinto siza kuzithetha, ingakumbi ezi siza kuqala ngazo.
Ii-Seta zazilungiselelwe ukuba zincedise wonke umntu onakho ukuba afumane izakhono. Kuba buhlungu ke kuthi xa sifumanisa ukuba kukho ii-Seta ezifumana i-disclaimer okokoko. Siyacela ke ukuba ezi Seta zikhawuleze zincediswe, ingakumbi kuba sifumanisa ukuba alukho ulawulo, kwaye le nto yokuqesha abantu nje kuba bengamalungu eqela elithile lezopolitiko ayinakulunga ngoba yenza ukuba bangawazi umsebenzi wabo. Yenye ke into esidanisileyo leyo.
Okwesithathu, sifumanisa ukuba kukho ingxaki nezazinto zibizwa ngokuba zii- internal risk managers. Abekho abantu abanokuthi beyikomiti ye-risk management bahlale bangawenzi umsebenzi, sifumanise ukuba abahambi neentlanganiso. Side safumanisa nokuba zide zantlanu iintlanganiso bengekho kuzo. Siyacela ke ukuba ezo zinto zilungiswe. Kungenjalo, sisenethemba kwii- Seta kakhulu kuba siyakholwa ukuba ziza kulunceda uluntu lwethu.
Ngoku ke ezi Seta zimbini sithi mazihambele phambili. Siyayixhasa loo nto siyi-Cope, kwaye siyayibulela into esiyifumene kwiSebe lezoKhuseleko yokuba izinto zinakho ukujikwa kwakamsinyane. Ndiyabulela. (Translation of isiXhosa paragraphs follows.)
[Mrs Z B N BALINDLELA: Hon Speaker, as Cope we would like to start by saying we are very disappointed that we will be addressing members, especially in the absence of Ministers. We thought they would be present and listen attentively to what we have to say, especially in respect of the things that we are going to start with.
Setas were meant to help everybody who is capable of being skilled. It is sad to find that there are Setas that often get disclaimers. We ask that these Setas be assisted as soon as possible, especially now that we have discovered that there is no management. This tendency of employing people just because they belong to a particular political party will not help as they tend to take their jobs for granted. This is one of the things that disappointed us.
Thirdly, we found that there is a problem with internal risk managers. It is unacceptable to have risk management committee members who are inefficient and who do not even attend meetings. We have also discovered that there were five meetings that they didn't attend. We ask that those things be rectified. However, we still have hope in the Setas because we believe that they will help our people.
Now we are saying that these two Setas must go forward. As Cope, we support that and we appreciate the news we received from the Department of Defence and Military Veterans that there is a potential for transformation, and soon. I thank you.]
What is the point you are rising on, hon member?
Speaker, I wanted to find out if the hon member would be prepared to take a question, but she has now left the podium.
Hon member, there's always a chance during the break should you want to continue to ask the question.
Speaker, both the Energy Sector Education and Training Authority and the Public Services Sector Education and Training Authority obtained disclaimers of audit opinions, as the previous speakers have indicated. This is the worst possible audit determination that the Auditor-General can make.
Frequently, a poor audit outcome is reflected in poor service delivery. It is urgent, therefore, that effective interventions are put in place to ensure that matters raised by the Auditor-General are corrected.
The Setas are just too important to job creation and skills training that there should be any doubt regarding their financial wellbeing. However, hon Speaker, I believe that progress with regard to both Setas is being made.
The Minister has, since the disclaimers, put both Setas under administration in line with section 15 of the Skills Development Act. The mandate of the appointed administrators includes taking over the role of the accounting authority of the Eseta and also includes a review of the conditions of employment of the chief executive officer, chief financial officer and other employees.
There are signs, at least with the Eseta, that the situation is being turned around. For the 2010-11 financial year, the Eseta, while not receiving a completely clean audit, has at least not received another disclaimer. The Eseta has also taken disciplinary action regarding unauthorised, fruitless and wasteful expenditure raised in the resolution before the House today. If the urgent and immediate objective is for the Eseta to receive clean audits, the following five things need to be done with haste: implement effective internal control systems; ensure leadership of the highest calibre at the level of board and management; provide adequate training to staff for the necessary skills for proper and accurate accounting; have properly-functioning internal audit systems and audit committees; and impose strict adherence to the Public Finance Management Act, Treasury regulations, and other relevant prescripts.
Speaker, if these basic requirements of good governance are implemented, then there is no reason why the history of disclaimers, which these Setas have received, should not be a thing of the past.
In terms of the resolution before the House, as the chair has indicated, the executive authority, the Minister, is required to report back to Parliament within 60 days of this resolution. We look forward to his report.
Speaker, that the situation can be turned around is evident in the Department of Defence and Military Veterans, the resolution of which is also tabled here today, and which was also referred to earlier by the chair of the committee.
Their asset register continues to be a stumbling block to receiving a clean audit. However, under strong leadership, the department has reduced the number of qualifications from eight in 2008 to six in 2009, and to one in the 2010 financial year.
Speaker, this is indeed progress and I believe, if emulated across other departments and entities, the situation with regard to audit opinions could be turned around. The ANC supports the resolutions before the House. Thank you. [Applause.]
That concludes the list I have in front of me of parties wishing to make declarations.
Declarations of vote made on behalf of the Democratic Alliance, Congress of the People and African National Congress.
Speaker, I move:
That the reports be adopted.
Motion agreed to.
Third Report of Committee On Public Accounts on Report of Auditor-General on annual report and financial statements of Energy Sector Education and Training Authority for 2009-10 financial year accordingly adopted. Report of Committee on Public Accounts on annual report and financial statements of Road Traffic Management Corporation, and report of Auditor- General on financial statements of Road Traffic Management Corporation accordingly adopted.
Sixth report of Committee on Public Accounts on report of Auditor-General on annual report and financial statements of Public Services Sector Education and Training Authority for 2009-10 financial year accordingly adopted.
Seventh report of Committee on Public Accounts on report of Auditor-General on annual report and financial statements of Department of Defence and Military Veterans for the 2009-10 financial year accordingly adopted.