1. PRESENTATION TO MEMBERS OF THE PORTFOLIO COMMITTEE ON LABOUR THE DIDTETA 2004/2005 ANNUAL REPORT OSTENWALD LOUW FORMER ACTING CEO DIDTETA 14 OCTOBER 2005

2. DIDTETA SECTOR PROFILE The DIDTETA Sector consists of the following 10 member institutions: Department of Foreign Affairs (DFA) Department of Defence (DoD) Department of Trade and Industry (DTI) National Intelligence Agency (NIA) South African Secret Service (SASS) DIDTETA Report to PC on Labour on Annual Report 04-05

3. DIDTETA SECTOR PROFILE ARMSCOR ARMSCOR Business Competition Commission International Trade Administration Commission (ITAC) Companies and Intellectual Property Registration Office (CIPRO) Total Number of Employees: 81 335 DoD=92.5% Other=7.5% DIDTETA Report to PC on Labour on Annual Report 04-05

4. SCARCE AND CRITICAL SKILLS NEED OF THE SECTOR The critical and scarce skills demand within the sector is for especially African and Female staff in the following priority categories: Intelligence professional staff at NQF Level 5 to 7 Pilots (combat, helicopter, transport, Maritime and reconnaissance). Intelligence support staff (clerks) NQF Level 4 Defence Foreign Relations staff DIDTETA Report to PC on Labour on Annual Report 04-05

5. SCARCE AND CRITICAL SKILLS NEED OF THE SECTOR Special Forces skilled staff Combat skilled soldiers Electrical, Electronic, Aircraft, and Mechanical Technicians Electrical, and Electronic Engineers Occupational, Health and Safety (OHS) professional staff DIDTETA Report to PC on Labour on Annual Report 04-05

6. Medical and Nursing Professionals Air Traffic Controllers (ATC’s) Human Resources Management skilled staff Company, Competition and Intellectual Property Law Expertise SCARCE AND CRITICAL SKILLS NEED OF THE SECTOR DIDTETA Report to PC on Labour on Annual Report 04-05

7. SETA PROFILE

8. NSDS 2001-2005 ACHIEVEMENTS Indicator 1.1: No. of workers who have achieved NQF Level 1. Target: 3520 DIDTETA Result: 5281 Comment: Exceeded target by 50% DIDTETA Report to PC on Labour on Annual Report 04-05

9. NSDS 2001-2005 ACHIEVEMENTS Indicator 1.2: No. of workers who have successfully completed structured learning programmes. Target: 56 000 DIDTETA Result: 73 369 Comment: Exceeded Target by 31% DIDTETA Report to PC on Labour on Annual Report 04-05

10. NSDS 2001-2005 ACHIEVEMENTS Indicator 1.3: No. of enterprises that achieved IIP Standard Target: 1 Governement Department 2 Divisions of the DoD DIDTETA Result: DTI as a pilot poject achieved the standard. DFA, DoD, ARMSCOR, DIDTETA signed letters of commitment. Assessments were good with only a few minor issues to be addressed. DIDTETA Report to PC on Labour on Annual Report 04-05

11. Indicator 2.3: Number of Learnerships available in the sector Target: 60 DIDTETA Result: 11 Comment: The DIDTETA planned to convert 48 Apprenticeships currently active in the DoD to Learnerships to change the non-designated status to designated status, but was advised by DoL that apprenticeships will be allowed to continue for the time being. DIDTETA Report to PC on Labour on Annual Report 04-05. DIDTETA Report to PC on Labour on Annual Report 04-05 NSDS 2001-2005 ACHIEVEMENTS

12. Indicator 3.1 SMME Support NOT APPLICABLE TO DIDTETA Indicator 5.1: No. of unemployed young people that entered into Learner- ships and Apprenticeships DIDTETA Comment: All young people in the DIDTETA Sector that have entered into Learnerships and apprenticeships are automatically employed the moment they sign their contracts. DIDTETA Report to PC on Labour on Annual Report 04-05 NSDS 2001-2005 ACHIEVEMENTS

13. The DIDTETA have supported 80 learners in New Venture Creation of which 75 received certificates. Project Military Veterans was approved by the NSF for an amount of R 56 million to skill and place 4350 beneficiaries. DIDTETA Report to PC on Labour on Annual Report 04-05 NSDS 2001-2005 ACHIEVEMENTS.

14. SDL Income R’000 Administration Levy: SARS96 Administration Levy: Gov. Departments 6.345 Administration Levy accrued 114 Total Admin Income 6,555 Employer Grant Income576 Employer Grant accrued 75 Total: Employer Grant Income651 Discretionary Grant Income108 Total SDL levies received 7,314 DIDTETA Report to PC on Labour on Annual Report 04-05 DIDTETA Report to PC on Labour on Annual Report 04-05 Annual Financials

15. Annual Financials Total Investment Income (interest income) 245 Total Revenue (include database to the navy) 7,784 7,784 (excluding NSF income of R7,000) Total Expenses (excl. NSF expenses) 7,182 (Made up as follows: Admin. Expenses 6,269 Employer grant project913 Expenses as % of SDL Income Admin expenses as % of Admin Income 95.6% Total expenses as % of SDL Income 98.1% DIDTETA Report to PC on Labour on Annual Report 04-05

16. Annual Financials NETT Surplus/(deficit)602 Total Cash and cash equivalents 8,168 made up as follows: NSF received in advance 2,868 DIDTETA cash reserves 5,300 (DIDTETA cash excludes accounts payable and VAT payable Totalling R1,054) DIDTETA Report to PC on Labour on Annual Report 04-05

17. Audit Results Qualifications: Lack of an appropriate documented and approved policy and procedure framework for the recording, monitoring, and the reconciliation of the Skills Development Levy (SDL) Income. DIDTETA has incorrectly accounted for the SDL Income transferred from the DoL for the current and prior years. As a result the following account balances are materially understated: SDL income (R 127 353) Accounts receivable (R165 139) Reserves (R35 253) DIDTETA Report to PC on Labour on Annual Report 04-05

18. SARS reversals amounting to R 103 295 and related impact on employer receivables has not been disclosed on Note 9 of the annual financial statement as required by Statements of Generally Accepted Accounting Practice. An unreconciled and unexplained difference of R 52 318 exists between the amount transferred by the DoL and the amount that is recorded as SDL Income of of DIDTETA. DIDTETA Report to PC on Labour on Annual Report 04-05 Audit Results

19. Emphasis of Matter DIDTETA has not implemented a supply chain management system. This is due to the merger with the Poslec SETA. A supply chain management system will be implemented in the next financial year. DIDTETA Report to PC on Labour on Annual Report 04-05

20. Challenges for 2005-2006 Reaction of employers due to policy changes in the Levy Grant Disbursement Regulations. Surpluses created by this accrual will be swept into reserves meaning that it will not be utilised for its purpose of operational costs. This will affect the Skills Development Levy Administration income for the current financial year. DIDTETA Report to PC on Labour on Annual Report 04-05

21. CONCLUSION The year 2004/2005 was a very traumatic year for the DIDTETA, in many ways, but all in all we experienced a very good year. The DIDTETA did for its sector what was humanly possible given the time and financial constraints. Looking back on the last five years, no effort has been a waste- every system put in place and procedure implemented will influence our way of doing business in the future. No training initiative has been in vain - all have been building blocks in creating awareness of the importance of skills development in the sector. We have confidence that together with our collegues at the Poslec SETA we will serve the Safety and Security Sector with loyalty and Professionalism. THANK YOU