1. PRESENTATION TO THE PORTFOLIO COMMITTEE ON HIGHER EDUCATION AND TRAINING 28 OCTOBER 2015

2. 2 OBJECTIVES OF THE PRESENTATION To account to the Portfolio Committee in respect of the implementation of management and governance principles post Administration To present to the Portfolio Committee the Annual Report of the CETA for the 2014/15 financial year To highlight the CETA’s main focus areas and goals for the next financial year

3. 3 MANDATE OF THE CETA The CETA’s mandate is to facilitate and fund skills development in the construction sector. It fulfills its mandate through the following means: - The development of its Sector Skills Plan, Strategic Plan and the Annual Performance Plan; - The development of qualifications, accreditation of providers and registration of practitioners; - The allocation and management of projects; - The monitoring and evaluation of projects, inclusive of the necessary quality assurance processes thereof. The Construction Education and Training Authority (CETA) is a Schedule 3A public entity, established by the Minister of Labour on 20 March 2000. In 2010 all SETAs’ functions were transferred to the Department of Higher Education and Training, which resulted in the CETA subsequently being re-established by the Minister of Higher Education and Training.

4. 4 BACKGROUND 2011: The CETA was placed under Administration in terms of the Skills Development Act, 1998, due to among others: Mismanagement of finances Failure to properly perform its functions 2011 - 2013: Period of Administration Focus on the elimination of risk Introduction of sound management and governance principles Appointment of Accounting Authority 2013 - to date: Post Administration period Implementation of sound management and governance practices Achievement of specific goals

5. 5 CETA EXECUTIVE AUTHORITY ACCOUNTING AUTHORITY CHIEF EXECUTIVE OFFICER CORE BUSINESS DEPARTMENT CORE BUSINESS DEPARTMENT CETA ORGANISATIONAL STRUCTURE PROJECTS DEPARTMENT PROJECTS DEPARTMENT CORPORATE SERVICES DEPARTMENT CORPORATE SERVICES DEPARTMENT FINANCE DEPARTMENT FINANCE DEPARTMENT

6. 6 MANAGEMENT AND GOVERNANCE Projects Management 2010/112014/15 Regional Committees allocated projectsIndependent entity allocating projects No due diligence conductedDue diligence being conducted No incorporation of Supply Chain Management processes Incorporation of Supply Chain Management processes Project commitment schedule was R350 million Project commitment schedule was R1.2 billion Tranche payment methodPerformance-based method Only employers eligible for Discretionary Grant funding Open for all entities Limited funding to Public entitiesLarge allocations to Public entities

7. 7 PROJECT ALLOCATION – INTEGRITY ENSURED Needs analysis conducted by the Projects Management Department Transparent grant allocation though online application tool Applications, evaluations and adjudications managed by an independent body which makes recommendations to the Accounting Authority Due diligence performed by independent entity to ensure that applicant has the ability to implement proposed projects Contracts only concluded after applicant has demonstrated capacity to perform

8. 8 PERFORMANCE-BASED PAYMENT SYSTEM No advanced payments are made Payments are made after proof of performance Only performing entities will receive their full grant allocation

9. 9 STEP ONE: SUBMISSION OF INVOICES Learner CETA Training provider Employer Qualified, employable learner Invoice submitted to a central invoice submission repository Invoice Specialist allocates invoices to be assessed by a team member Team member identifies discrepancies and liaises with submitting entity Compliant invoices are submitted to invoicing Specialist for quality control test

10. 10 STEP TWO: REVIEW OF INVOICES (CORE BUSINESS DEPARTMENT) Learner CETA Training provider Employer Qualified, employable learner Project Manager signs to confirm accuracy of work for which payment is claimed against the approved grant allocation and implementation plan Core Business Manager signs to confirm quality assurance of work claimed Core Business Executive signs as a first level of recommendation for payment and the invoice and supporting document is submitted to finance department

11. 11 STEP THREE: PAYMENT OF INVOICE (FINANCE DEPARTMENT) Learner CETA Training provider Employer Qualified, employable learner Finance Department confirms that requirements are met and that the relevant documents are submitted to the Finance Manager Payment is approved by the official with the requisite authority (i.e. the Finance Manager, CFO or CEO) depending on the amount of the invoice Once approved, the invoice is processed by the Finance Department for payment and captured on the CETA online banking system Once the Finance Manager confirms the payment has been captured, the CFO validates the instruction and the CEO finally releases the funds

12. 12 INVESTIGATION BY DHET An independent investigation into the management of the CETA has been commissioned by the DHET The investigation comes after various anonymous allegations of abuse of authority/powers by CETA officials were levelled against the CETA An independent law firm has been tasked with conducting the investigation and thereafter providing the DHET with its findings The CETA Board and Management are in full support of this process and await the findings

13. 13 AUDIT RESULTS: REPORT OF THE AUDITOR GENERAL FOR THE FY 2014/15 2010/11 FINANCIAL YEAR2014/15 FINANCIAL YEAR EMPHASIS OF MATTER Prior year misstatements were identified and the entity corrected these There were no emphasis of matter except in relation to the relicensing of the CETA R1 543 000 of irregular expenditure of was incurred No irregular expenditure was incurred

14. 14 REPORT OF THE AUDITOR GENERAL FOR THE FY 2014/15 2010/11 FINANCIAL YEAR2014/15 FINANCIAL YEAR PREDETERMINED OBJECTIVES Three strategic objectives were selected for audit The CETA received a disclaimer of audit opinion on all three strategic objectives audited due to insufficient performance information provided to the AG Three strategic objectives were selected for audit The CETA received unqualified audit opinions on two of the three programme areas For the other program area the CETA received a qualification for completeness only as 63 learners were not included in the report. However the CETA received unqualified audit opinions on the reliability and usefulness of the same programme area

15. 15 REPORT OF THE AUDITOR GENERAL FOR THE FY 2014/15 2010/11 FINANCIAL YEAR2014/15 FINANCIAL YEAR COMPLIANCE WITH RELEVANT LAWS AND REGULATIONS The CETA contravened section 14(3)(b) of the Skills Development Act by expending more than 12.5% of the total levies received for its Administration budget without the necessary approval The CETA stayed well below its allocated amount for Administration costs Non compliance with section 51(b)(ii) of the PFMA. The Accounting Authority did not take appropriate steps to prevent irregular expenditure. No finding were raised in this regard

16. 16 ACHIEVEMENTS OF THE ANNUAL PERFORMANCE OBJECTIVES LEARNERS ENTERED Learning Pathways2010/112014/15 Learnerships16053433 Apprenticeships3432982 Short Skills Programmes15151289 Recognition of Prior Learning 01218 Bursaries193581 Internships210686 Graduate Placements40342

17. 17 ACHIEVEMENTS OF THE ANNUAL PERFORMANCE OBJECTIVES LEARNERS COMPLETED Learning Pathways2010/112014/15 Learnerships11202240 Apprenticeships1108 Short Skills Programmes9251037 Recognition of Prior Learning 01218 Bursaries340

18. 18 NSDS III CETA ACHIEVEMENTS Technical Vocational Education and Training (TVET) Colleges - 42 out of 50 TVET colleges accredited in CETA qualifications Rural Skills Development - 5977 leaners in the system from rural areas. Small Medium Micro Enterprise (SMME) Development - 51 SMME’s comprising of 134 learners have been trained and supported Establishment of Skills Development Centres - 13 skills development centres being established Discretionary Grant Allocations to Public Entities R550 million allocated to Public Entities Bursaries Support - R46 million paid to NSFAS

19. 19 CETA PRESENCE IN PROVINCES ProvinceLocation Western CapeCollege of Cape Town Eastern CapeEast Cape Midlands College Northern CapeDepartment of Public Works, Roads and Transport MpumalangaServices SETA LimpopoCapricorn TVET College North WestTaletso TVET College GautengTshwane South TVET College KwaZulu NatalSEDA Construction Incubation Centre Free StateMotheo TVET College

20. 20 CETA’s FINANCIAL STATUS Revenue: - Revenue for the year 2014/15 was R640 million - Income increased by 73% since 2010/11 Expenditure: Mandatory grants - CETA disbursed R91 million Discretionary grants - R194 million was disbursed on a re-imbursive model to compliant entities in 2014/15 Administration - Administrative expenditure totalled to R57 million

21. 21 CETA’s FINANCIAL STATUS (CONTINUES) Commitment schedule: -CETA committed an amount of R1.6 billion on skills development and training as at 31 March 2015. The allocations have been made with the following marginalised populations as a priority -Women -Youth -People with Disability -Military Veterans Asset Management: -Asset value is R1.4 billion -All funds in reserves are invested with Corporate for Public Deposits (Reserve bank).

22. 22 FOCUS AREAS AND GOALS FOR FY 2015/16 Securing a clean audit for the 2015/2016 financial year Operationalising the 13 skills development centres in township and rural communities Increased involvement of women, disabled persons, youth, and military veterans in CETA training programs

23. 23 Univenda SDC

24. 24 Univenda SDC

25. 25 Vredendal SDC

26. 26 Bredasdorp SDC

27. 27 THANK YOU