. The NSF was established under the Skills Development Act of 1998. The NSF is responsible for funding projects identified in the National Skills Development Strategy (NSDS) as national priorities. The Director-General of the Department of Higher Education and Training is the accounting authority of the fund. . The NSF projects a total budget of R2 billion for the current financial year. The key programmes of the NSF include the Social Development Initiatives and Critical Skills Support which have been allocated 62% of the total budget for the past five years. . The key challenges of the NSF include, inter alia, improving institutional mechanisms and capacity, creating a stronger link with the department and addressing under-disbursement of funds.