Parliamentary Portfolio Committee Annual Report 2012/13 Services SETA

Table of Contents: Strategic Support Quality Management Department Human Resources Finance

STRATEGIC SUPPORT

Focus on Core Programmes Audited Core Programmes: 3. Mandatory Grants 4. Funded Skills Development 6. Sector Development Support Programmes: 1. Governance 2. Administration 5. Sector Skills Planning and Research 7. Monitoring and Evaluation

Programme 3: Mandatory Grants Performance Indicator 2012/13 Target 2012/13 Result # of sector employers that submitted WSPs and ATRs 3,3003,051 % increase in sector employers that submitted WSPs and ATRs 25%18% % of sector employers that submitted WSPs and ATRs that received mandatory grant reimbursements 100% 73% (2223/3051)

Programme 4: Funded Skills Development * Results structured into learning interventions instead of 6 sub-programmes Performance Indicator 2012/13 Target 2012/13 Result 2012/13 Allocations # of Learnerships entered9, # of Artisans entered1,50000 # of Internships entered1,8501,0261,792 # of Bursaries entered2, # of AET entered1,45000 # of RPL entered2,00000 # of Skills Programmes entered7, ,850 TOTAL26,3001,5406,642

Programme 6: Sector Development Performance Indicator 2012/13 Target 2012/13 Result # of training provider applications processed # of monitoring site visits90035 # of external moderation visits # of learners certificated6,50012,334 # of registered constituent assessors # of registered constituent moderators # of FET college partnerships123

Report of the Auditor-General Predetermined Objectives AG Material FindingsCorrective Actions Usefulness: - consistency between reported performance and planned objectives 26% objectives 30% indicators inconsistent Addendum to 2013/14 APP will enable improvement in current “gap” year. 2014/15 APP enables alignment - measurability53% targets not specific 64% not well defined In addition to above, technical indicator descriptions being documented as required Reliability: - data validity, accuracy and completeness Unable to establishPI plan being developed that documents and strengthens data management practices Strategic PlanPeriod, objectives and outcomes not addressed as required 2014/15 Strategic Plan revised to strengthen compliance with National Treasury requirements

Programme 3: Mandatory Grants AG 2012/13 findingsCorrective action WSP accepted without request for extension by employer Not repeated in 2013/14 Mandatory grant not paid quarterly as per the grant regulation Quarterly payments to be released once levy downloads available. SDMS modified to enable capturing and submission of WPS/ATR/PTP/PTR all year round Mandatory grants paid to exempt companies In terms of Circular 9 employers are encouraged not to reclaim contributions from SARS. Mandatory grant policy to be reviewed to provide for signing of a waiver

Programme 4: Funded Skills Development (1) AG 2012/13 findingsCorrective action Records management: Outstanding information Evidence for NSF expenditure Certification of artisans New systematic filing system Storage and access of physical records improved Developed checklists to ensure compliance of supporting documents Duplicates identified in reported artisans Ensure SQMR and QPR are verified and approved within LI unit prior to submission to PI unit Duplication of interns reported under current year and previous year targets Ensure SQMR and QPR are verified and approved within LI unit prior to submission to PI unit

Programme 4: Funded Skills Development (2) AG 2012/13 findingsCorrective action The date learner entered into the Learnership does not agree to the date on the Learnership agreement Improved contract management business processes to be implemented

Programme 6: Sector Development AG 2012/13 findingsCorrective action Training provider application forms not dated Accreditation online system includes date of application Statement of achievements for learners who existed on skills programmes are not dated Oracle system has been updated to include the date of issue of the statement of results for skills programmes Training provider applications not complete Sub-contracting with training provider will become a pre-condition of the main contract with employer Records management: Information not provided. Record management systems and monthly reporting improvements implemented

QUALITY MANAGEMENT DEPARTMENT

Challenges with certification Challenge: Challenge of certificates not awarded during the period of administration and when quality assurance was outsourced to training provider during period. Backlog of certificates from previous financial years – analysed Certification backlog project – Additional dedicated resource appointed to audit and investigate current challenge whilst division carries on with achieving current targets of funded, unfunded and self-funded learning interventions 11/2; 12/13 and 13/14.

Impact of corrective action Certificates issued May 2013 – February ,327

HUMAN RESOURCES

OVERVIEW In the financial year ended 2012/2013, the Human Resource Department concluded the following key initiatives: – Development of the Human Resources Framework – Development of the Human Resources Policies and Procedures – Reviewed the organisational structure – Completed the Skills Audit for 2012 – Placed dedicated effort to reduce the organisation’s vacancy rate – Designed and approved the organisations performance management system – Whilst these are key achievements as Human Resources of the organisation, there is still much room for improvement.

EMPLOYMENT AND VACANCIES 2011/2012 NO. OF EMPLOYEES 2012/2013 APPROVED POSTS 2012/2013 NO. OF EMPLOYEES 2012/2013 VACANCIES % OF VACANCIES Occupational Category Number of Posts Headcount Vacancy Rate Semi- Skilled (BL –BU)988810% Skilled (CL-CU) % Middle Management (DL)362433% Senior Management (DU)11109% Top Management (E)6433% TOTAL %

REASONS FOR STAFF LEAVING REASONNUMBER Resignation10 Discharged5 End of contract3 Retrenched3 Absconded1 Pension1 Deceased1 TOTAL24

FINANCE

Audit outcomes and action plans to address audit findings  SSETA was qualified on commitments:  Commitment schedule included expired contracts  Amounts in schedule did not agree to contracts  Schedule did not include all commitments (completeness) Root cause : System errors Legacy commitments that were never disbursed Action plan : – Formed a task team to clean up the contract schedule/register which comprises of finance, legal, PMO and QMD – Regular monitoring of contracts and project nearing completion – In process of acquiring an upgrade to the commitments module (Navision) – Contacted partners with legacy balances to come forward

Other matters raised by the AG and action plans Audit FindingRoot causeAction plan Non-compliance with laws an regulations Financial statement not submitted by 31 May Lack of processes to prepare financial statements regularly (monthly). Financial statement are prepared on a monthly basis. Interim financial statements will prepared to ensure that all weaknesses are addressed before the year end Material adjustments made to financial statements after audit Unidentified irregular expenditure No processes to identify, prevent and detect irregular expenditure Ongoing monitoring of irregular expenditure. Educating other units/department on the implications of irregular expenditure

Audit findingsRoot causeAction plan Lack of adequate supply chain processes 3 quotes for purchases < R competitive bidding for purchases > R500,000 Non-compliance to Treasury Regulations Supply chain management processes are now being implemented. All procurement requests now follow the process of 3 quotes or competitive bidding. A procurement register has been established to monitor procurement requests to ensure these are executed timely to avoid deviations.

Plans going forward to address findings Update / implementation of a financial reporting system Developing policies and standard operating procedures Action plans with responsible people, target implementation dates that are followed up regularly Monthly reporting (financial statements, management accounts) Recruiting appropriate personnel

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