2. Annual Report Briefing Select committee on Education and Recreation 26 November 2014, South African Parliament Cape Town

3. Outline Introduction CATHSETA Background / Overview Legislative Mandates CATHSSETA Strategic Direction Learning Programmes Financial Performance Human Resources Governance Way Forward Questions

4. Core Mandate of CATHSSETA The Purpose of the CATHSSETA is to contribute to South African Economy through the facilitation of skills development in the relevant Sub-Sectors. CATHSSETA is broken into six (6) sub-sectors namely; Culture, Arts & heritage Tourism and Travel services Hospitality Sport, Recreation and Fitness Conservation Gaming and Lotteries

5. Legislative Mandates South African Constitution Skills Development Act of 1998; South African Qualifications Authority Act of 1995; Education and Training Quality Assurance Bodies Regulation of 1998; Skills Development Levies Act of 1999; Learnership Regulations of 2006; National Qualifications Framework Act of 2008; Public Finance Management Act New Grant Regulation effective from 1 April 2013.

6. Overview/Background of the 21013/14 ARP CATHSSETA has been facing challenges of consistently not meeting its predetermined objectives. There’s been serious allegations made against some Board members and CEO The Board commissioned Grant Thornton to investigate the allegations and make recommendations The Board couldn’t act on the findings due to their differences The Minister instructed the Board to resolve the challenges The infighting within the Board affected the performance of the organization wherein the targets were not met on a quarterly basis. For the FY 2013/14, CATHSSETA received a qualified Audit with matters of emphasis Due to disfunctionality, the Minister instructed the DG to put the SETA under administration An Administrator was appointed on the 16 th October to take over as the Accounting Authority for CATHSSETA

7. Overview (continued) Summary: Highest employed are in the hospitality and lowest Arts, Culture, and Heritage Distribution of Employees Per Sub-Sector

8. CATHSSETA Strategic Direction Vision: Sustainable People Development for Prosperity Values: Service Excellence; Efficiency; Equity; Integrity; Partnership; Quality; and Accessibility Mission: To facilitate the skills development of our people through creating strategic partnerships to ensure a meaningful contribution to the economic growth within our sector Strategic Objectives 1.Establishing A Credible Institution Mechanism For Skills Planning 2.Increasing Access To Occupationally Directed Programmes 3.Promoting The Growth Of Public Fet College System That Is Responsive To Sector, Local, Regional & National Skills Needs & Priorities 4.Addressing the Low Level Of Youth & Adult Language & Numeracy Skills To Enable Additional Training 5.Encourage Better Use Of Workplace-based Skills Development 6.Encouraging And Supporting Cooperatives, Small Enterprises, Worker Initiated, NGO & Community Training Initiatives 7.Increasing Public Sector Capacity For Improved Service Delivery And Supporting The Building Of A Developmental State 8.Building Career & Vocational Guidance

9. Priority Scarce and Critical Skills Hotel Manager Restaurant Manager Sport facility Manager Small Business Manager Park Ranger Conservation Scientist Sound Technician Chef Sports Official Cook

10. Learning Programmes

11. These are programmes that lead to a Qualification Learnerships Internships Academic learning programmes Skills programmes (short courses) Learnerships & Internships are the core mandates as they interact workplace experience

12. Number Certificated by Province 1026 1508 412 970 878 970 513 275 2232 Comments Highest in Western Cape Lowest in Northern Cape

13. Learner Equity DimensionNumber CertificatedPercentages Black: African5627 63% Black: Coloured930 10% Black: Indian / Asian253 3% Unspecified138 2% White2033 23%

14. Assessor and Moderator Registration DimensionNew / ReceivedApproved / Registered Programme282 46 Assessor216 107 Moderator50 60

15. Bursaries Awarded by Province 40 37 39 37 13 5 52 Comments Highest in Western Cape Lowest in Northern Cape Unknown Limpopo

16. Discretionary Fund expenditure by Province ProvinceTotal Number of Learners Total amount Eastern Cape 187 R 3 224 000 Free State 219 R 2 571 125 Gauteng 370 R 6 697 000 Kwazulu Natal 991 R 9 619 190 Limpopo 124 R 1 516 125 Mpumalanga 32 R 675 000 North West 198 R 1 896 000 Northern Cape 7 R 84 000 Western Cape 500 R 5 496 125

17. STATEMENT OF FINANCIAL PERFORMANCE (ANNUAL REPORT P 170) R’000 REVENUEFY 2013/14FY 2012/13FY 2011/12% change Skills Development Levy Income255 386222 678197 70213% Penalties & interest39002 1872 484-12% Donor Income1 7217 567 Investment Income51105 4443 45458% Other TOTAL REVENUE264 396232 030211 207 EXPENSES Mandatory Grants48 15594 62078 95920% Discretionary Projects169 727105 95854 53394% Donor Expenses1 7217 567 Admin32 56027 65725 4819% Other681 TOTAL EXPENSES250 442229 962166 622 Surplus13 9542 06844 584

18. Administrators Observations Divided organization with high levels of mistrust amongst employees High levels of pending disciplinary hearings Contracts awarded without following procurement procedures especially unsolicited bids Contracts awarded to non accredited providers and compliance being facilitated expost facto Award of international outside of the policy Broken relationships between AGSA, Internal Auditors and management No implementation plan for AGSA recommendations Qualified Audit opinion by AGSA

19. What has been Done by the Administrator Meeting management for a briefing Meeting with AGSA & Internal Audit for a briefing Follow up on AGSA findings and develop a plan to ratify identified weaknesses Assessment of CATHSSETA’s financial position Precautionary suspension of the CEO &CFO Completion of outstanding investigations Stabilizing the organization – Address staff uncertainties & communicate change – Review plans, budgets and targets for current FY – Review strategy & APP for 2015/16 FY – Weekly management meetings and monthly staff meetings – Engagement of Stakeholders in Gauteng, Durban and Cape Town – Rationalization of functions to ensure integration and improve performance – Finalize Window 2 Discretionary grants allocations

20. What’s the Plan until Financial Year end Engagement of TVETs to strengthen partnership and assess capacity for training Sign MOUs with TVETs and workplaces for training and placement of learners Bimonthly engagement of stakeholders Establish joint working committes across sectors Finalize plans for 2015/16 FY Develop and implement systems to address AGSA findings

21. QUESTIONS / COMMENTS THANK YOU