PRESENTATION ON ANNUAL FINANCIAL STATEMENTS AND AUDIT RESULTS FOR 2015-16 – CHIETA AGM 26 OCTOBER 2016 PRESENTED BY: Farhad Motala

OUTLINE OF PRESENTATION CHIETA, The Catalyst for Enhanced Skills, Economic Growth and Employability OUTLINE OF PRESENTATION 2015\16 Annual Report – Annual Financial Statements and Audit Results Allocation of Net Deficit for the year ended 31 March 2016 Maximising ROI - Average cost of learning programs for the year ended 31 March 2016 Analyses of Income and Expenditure over NSD 111 period (2011-2016) External Auditor’s (AGSA) final audit assessments of Leadership, Financial and performance management and Governance of CHIETA Appreciation

ANNUAL FINANCIAL STATEMENTS AND AUDIT RESULTS CHIETA, The Catalyst for Enhanced Skills, Economic Growth and Employability ANNUAL FINANCIAL STATEMENTS AND AUDIT RESULTS Unqualified audit opinion and clean audit outcome 4% increase in SDL income from R426.6 million for the year ended March 2015 to R443.5 million for the year ended March 2016 Total Revenue increased by 4% from prior year SDL income escalated by annual equivalent average of 21% for the entire period since inception Grant and Project expenses increased by 11% from R397 million in 2014-15 to R442 million in 2015-16 Grant and project expenses represented 115% of grant levy income received (R385 million) for 2015-16

ANNUAL FINANCIAL STATEMENTS AND AUDIT RESULTS CHIETA, The Catalyst for Enhanced Skills, Economic Growth and Employability ANNUAL FINANCIAL STATEMENTS AND AUDIT RESULTS Average grant and projects disbursement rate of over 94.6% over the entire NSDS 111 period (2011-2016) DG reserves – 98.3%committed as at 31 March 2016 Over R37 million (Return on investment – R21.9 Million, Admin savings – R750K, and Unclaimed MG – R14,8 Million) transferred to DG Reserve for strategic sector skills priorities Administration expenses remained within 10.5% legislated provision Consultancy and service provider fee reduction of over 29%, from R3.1 million in 2014-15 to R2.2 Million in 2015-16

ANNUAL FINANCIAL STATEMENTS AND AUDIT RESULTS CHIETA, The Catalyst for Enhanced Skills, Economic Growth and Employability ANNUAL FINANCIAL STATEMENTS AND AUDIT RESULTS Committed DG Reserves decreased by 22 % (R15.3 Million) from R286 Million in 2014-15 to R271 Million in 2015-16 89% of DG and project funds was utilised in PIVOTAL programs Mandatory Grant (MG) expense represented 87% of funds received for MG’s (20%) Cash outflow on Grant and Project Payments increased by 8.1% from R399 Million in 2014-15 to R432 Million for 2015-16

ALLOCATION OF NET DEFICIT FOR THE 2015-16 FINANCIAL YEAR CHIETA, The Catalyst for Enhanced Skills, Economic Growth and Employability ALLOCATION OF NET DEFICIT FOR THE 2015-16 FINANCIAL YEAR 2015/16 R'000 Net Deficit (15,355) Administration Savings 750 Mandatory Grant Surplus 14,842 Discretionary Grant Deficit (30,948)

DG Program – Sector Skills / NSDS Priority Expenditure 2015/16 (R’000) CHIETA, The Catalyst for Enhanced Skills, Economic Growth and Employability DG Program – Sector Skills / NSDS Priority Expenditure 2015/16 (R’000) No. of Beneficiaries Average Cost per Learner % of Total DG expenditure Work Integrated Learning R62,668 2 087 R30,027 23.0% Learnerships R85,568 5 811 R14,725 31.4% Artisans / Apprenticeships R44,468 1 864 R23,856 16.3% Bursaries R43,095 1751 R24,611 14.6% Skills Programs R24,437 6792 R3,598 9.0% ABET R2,053 427 R4,807 0.8% Recognition of Prior Learning (RPL) R8,659 1362 R6,357 3.2% TVET Support (Partnerships) R3,254 195 R16,688 1.2%

DG Program – Sector Skills / NSDS Priority Expenditure 2014/15 (R’000) CHIETA, The Catalyst for Enhanced Skills, Economic Growth and Employability DG Program – Sector Skills / NSDS Priority Expenditure 2014/15 (R’000) No. of Beneficiaries Average Cost per Learner % of Total DG expenditure Work Integrated Learning R49,463 1766 R28,008 20% Learnerships R87,786 5 671 R15,480 35.5% Artisans / Apprenticeships (Including RPL) R45,211 2 294 R19,708 18.3% Bursaries R25,669 948 R27,076 10.4% Skills Programs R21,649 8 559 R2,529 8.8% ABET R2,655 795 R3,340 1.1% Career Guidance R573 4291 R574 0.2%

Skills Development Levy income from 2011 - 2016 CHIETA, The Catalyst for Enhanced Skills, Economic Growth and Employability Skills Development Levy income from 2011 - 2016

Administration income vs expenditure 2011 - 2016 CHIETA, The Catalyst for Enhanced Skills, Economic Growth and Employability Administration income vs expenditure 2011 - 2016

SDL Income vs Employer Grant and Project Expenses 2011 -2016 CHIETA, The Catalyst for Enhanced Skills, Economic Growth and Employability SDL Income vs Employer Grant and Project Expenses 2011 -2016

CHIETA, The Catalyst for Enhanced Skills, Economic Growth and Employability Key Challenges Innovative and timely solutions to balance and support emerging national priorities and industry needs Fostering and maintaining a culture of sustained delivery of DG and Project deliverables Remaining relevant as the Authority on skills development based on the NSLP:2015 Maximum 7.5% admin threshold for DG and project management – target spending levels must be achieved

Committed Balances of Discretionary Grant Projects at 31 March 2016 CHIETA, The Catalyst for Enhanced Skills, Economic Growth and Employability Committed Balances of Discretionary Grant Projects at 31 March 2016 Category Discretionary Grant Programs Closing balance 31 March 2016 R'000 Non PIVOTAL Adult Basic Education and Training (ABET) 1,633 PIVOTAL Apprentice / Artisan training and development 36,831 Recognition of Prior Learning (RPL) 16,905 Further Education and Training (FET) 1,890 Bursaries 34,676 Internships 119 Skills Programmes 14,879 Workplace Experience / WIL 27,464 Work Placement / Employment Creation 25,097 Learnerships 85,002 Other Occupationally Directed Programs 219 TOTAL 244,714

Actual achievement against targets per baseline indicator for 2015-16 CHIETA, The Catalyst for Enhanced Skills, Economic Growth and Employability Actual achievement against targets per baseline indicator for 2015-16

CHIETA Audited Performance Information 2015/16 CHIETA, The Catalyst for Enhanced Skills, Economic Growth and Employability CHIETA Audited Performance Information 2015/16 Performance Indicator(Learnerships, Skills Programmes, bursaries and internships) Target Actual Percentage variance Employed learners entered 5360 6247 116% Employed certificated 2655 3586 135% Unemployed entered 4270 8450 198 % Unemployed certificated 2135 3859 181%

CHIETA Audited Performance Information 2015/16 CHIETA, The Catalyst for Enhanced Skills, Economic Growth and Employability CHIETA Audited Performance Information 2015/16 Performance Indicator Target Actual Percentage variance Artisans entered 1720 1864 108% Artisans certified 444 792 178% TVET College Partnerships 18 20 111% TVET Workplace experience entered 700 937 134%

CHIETA Audited Performance Information 2015/16 CHIETA, The Catalyst for Enhanced Skills, Economic Growth and Employability CHIETA Audited Performance Information 2015/16 Performance Indicator Target Actual Percentage variance Support to Co-operatives, NGOs, worker initiated training and small businesses 152 210 138% Support to large, medium and small companies 689 791 115%

APPRECIATION Governing Board and CHIETA Board Committees CHIETA, The Catalyst for Enhanced Skills, Economic Growth and Employability APPRECIATION Governing Board and CHIETA Board Committees CEO, Management and Staff Audit Committee, External and Internal audit CHIETA Stakeholders

CHIETA, The Catalyst for Enhanced Skills, Economic Growth and Employability THANK YOU