2014/15 NATIONAL SKILLS FUND Funding to Skill our Nation Reports/NSF report - National Skills... ·...

NATIONAL SKILLS FUNDFunding to Skill our Nation

2014/15

NATIONAL SKILLS FUND ANNUAL REPORT 2014/15

Funding to skill our nation

1NATIONAL SKILLS FUND ANNUAL REPORT 2014/15


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PART A: GENERAL INFORMATION ........... 5

1. NATIONAL SKILLS FUND GENERAL INFORMATION ............................ 6

2. LIST OF ABBREVIATIONS/ACRONYMS .............................................. 7

3. STRATEGIC OVERVIEW ................................................................... 10

3.1 Our Vision ........................................................................... 10

3.2 Our Mission ......................................................................... 10

3.3 Our 7 Values ....................................................................... 10

3.4 Strategic Outcome Oriented Goals ......................................... 10

4. LEGISLATIVE AND OTHER MANDATES ............................................. 11

4.1 Established in terms of the Skills Development Act ..................... 11

4.2 Retention of accumulated surplus ............................................ 11

4.3 Listed as a Schedule 3A public entity in terms of the PFMA ........ 11

4.4 Key legislation applicable to the NSF ...................................... 11

5. ORGANISATIONAL STRUCTURE ...................................................... 12

5.1 Executive Officer’s Office ....................................................... 12

5.2 Bursaries ............................................................................. 13

5.3 Strategic Projects .................................................................. 14

5.4 Skills Support Programmes ..................................................... 15

5.5 Provincial Operations ............................................................ 16

5.6 Finance and Administration ................................................... 17

6. FOREWORD BY THE MINISTER OF HIGHER EDUCATION

AND TRAINING ............................................................................. 18

7. FOREWORD BY THE DEPUTY MINISTER OF HIGHER

EDUCATION AND TRAINING .......................................................... 20

8. FOREWORD BY THE DIRECTOR-GENERAL OF HIGHER

EDUCATION AND TRAINING AS THE ACCOUNTING AUTHORITY ..... 22

9. EXECUTIVE OFFICER’S OVERVIEW ................................................... 24

PART B: PERFORMANCE INFORMATION .. 27

1. STATEMENT OF RESPONSIBILITY FOR PERFORMANCE

INFORMATION .............................................................................. 28

2. AUTIDOR’S REPORT: PREDETERMINED OBJECTIVES ........................... 28

3. OVERVIEW OF THE NATIONAL SKILLS FUND’S PERFORMANCE ......... 29

3.1 Service delivery environment.................................................. 29

3.2 Organisational environment ................................................... 30

3.3 Key policy developments and legislative changes ..................... 30

3.4 Strategic outcome oriented goals ............................................ 31

4. PERFORMANCE INFORMATION 2014/15 ....................................... 34

4.1 Strategic Objective 1: Effective and efficient

programme/project preparation ............................................. 34

4.2 Strategic Objective 2: Effective and efficient

project management ............................................................. 37

4.3 Strategic Objective 3: Excellence in resource management ........ 40


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5. BENEFICIARY FACTSHEET 2014/15 ................................................. 43

6. PERFORMANCE INFORMATION 2013/14 ....................................... 44

7. SUMMARY OF FINANCIAL INFORMATION ...................................... 54

7.1 Revenue collection ................................................................ 54

7.2 Programme expenditure ........................................................ 55

PART C: GOVERNANCE .......................... 57

1. INTRODUCTION ............................................................................ 58

2. PORTFOLIO COMMITTEES ............................................................... 58

3. EXECUTIVE AUTHORITY .................................................................. 58

4. THE ACCOUNTING AUTHORITY ..................................................... 58

5. RISK MANAGEMENT ...................................................................... 59

6. INTERNAL CONTROL ...................................................................... 59

7. INTERNAL AUDIT AND AUDIT COMMITTEES .................................... 59

8. COMPLIANCE WITH LAWS AND REGULATIONS ............................... 60

9. FRAUD AND CORRUPTION ............................................................. 60

10. MINIMISING CONFLICT OF INTEREST ............................................. 60

11. CODE OF CONDUCT ..................................................................... 60

12. HEALTH, SAFETY AND ENVIRONMENTAL ISSUES.............................. 60

13. SOCIAL RESPONSIBILITY ................................................................. 61

14. MATERIALITY AND SIGNIFICANCE FRAMEWORK ............................. 61

15. AUDIT COMMITTEE REPORT ............................................................ 61

PART D: HUMAN RESOURCEMANAGEMENT ...................................... 651. INTRODUCTION ............................................................................ 66

2. HUMAN RESOURCE OVERSIGHT STATISTICS .................................... 68

PART E: FINANCIAL INFORMATION ......... 731. STATEMENT OF RESPONSIBILITY ...................................................... 74

2. REPORT OF THE EXECUTIVE OFFICER ............................................... 76

3. REPORT OF THE AUDITOR-GENERAL TO PARLIAMENT ON THE

NATIONAL SKILLS FUND ................................................................. 86

4. ANNUAL FINANCIAL STATEMENTS ................................................. 91

Statement of financial position .......................................................... 92

Statement of financial performance ................................................... 94

Statement of changes in net assets .................................................... 96

Statement of cash flow ..................................................................... 97

Statement of comparison of budget and actual amounts ....................... 98

Notes to the Annual Financial Statements ......................................... 100

5. ANNEXURE: LIST OF SKILLS DEVELOPMENT PROGRAMMES AND

PROJECTS FUNDED BY NSF .......................................................... 189

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PART A General Information



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1. NATIONAL SKILLS FUND GENERAL

INFORMATION

REGISTERED NAME: National Skills Fund

PHYSICAL ADDRESS: 178 Francis Baard Street

PRETORIA

0002

POSTAL ADDRESS: Private Bag X174

PRETORIA

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TELEPHONE NUMBER/S: +27 86 9990 NSF (673)

FAX NUMBER: +27 012 323 0291

WEBSITE ADDRESS: www.dhet.gov.za

EXTERNAL AUDITORS: The Auditor-General of South Africa

Lefika House

300 Middel Street

New Muckleneuk

Pretoria

0001

BANKERS: National Treasury

40 Church Square

Pretoria

0002

First National Bank

215 Francis Baard Street

Pretoria

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Standard Bank

177 Dyer Street

Hillcrest Office Park

Falcon Place

Hilcrest

Pretoria

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PART A General Information



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ADRS Applied Development Research Solutions

BRICS Brazil, Russia, India, China and South Africa

CAO Centralised Applications Office

CACH Central Applications Clearing House

CAS Career Advice Services

CC Closed Corporation

CD Chief Director

CEM Council of Education Ministers

CEO Chief Executive Officer

CEPD Centre for Education Policy Development

CESM Classification of Educational Subject Matter

CET Community Education and Training

CETA Construction Education and Training Authority

CETC Community Education and Training Centre (see PALC)

CFO Chief Financial Officer

CHE Council on Higher Education

COL Commonwealth of Learning

COMEDAF Conference of Ministers of Education of the African Union

COSE Collaboration for Occupational Skills Excellence

CPIX Consumer Price Index

CPUT Cape Peninsula University of Technology

CSIR Council for Scientific and Industrial Research

CUT Central University of Technology

DAFF Department of Agriculture, Forestry and Fisheries

DBE Department of Basic Education

DDG Deputy Director-General

DG Director-General

DHET/DEPARTMENT Department of Higher Education and Training

DIRCO Department of International Relations and Cooperation

DOL Department of Labour

DPE Department of Public Enterprises

DSAP Duel System Apprenticeship Programme

DST Department of Science and Technology

DTA Denel Technical Academy

DTI Department of Trade and Industry

ECM Enterprise Content Management

EEP Employment Equity Plan

EFA Education for All

ELRC Education Labour Relations Council

ENE Estimates of National Expenditure

EPWP Expanded Public Works Programme

ETQA Education and Training Quality Assurance

EXCO Executive Council

FETCBU Further Education and Training Colleges Bargaining Unit

FETMIS Further Education and Training Management Informa-tion System

FMPPI National Treasury’s Framework for Managing Programme Performance Information

FMS&G Financial Management Systems and Guidelines

GENFETQA General and Further Education and Training Quality Assurance

GEPF Government Employee Pension Fund

GETC General Education and Training Certificate

2. LIST OF ABBREVIATIONS/ACRONYMS


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GFETQSF General and Further Education and Training Quality Assurance

GIS Geographical Information System

GITO Government Information Technology Office

GPSSBC General Public Service Sector Bargaining Council

GRAP Generally Recognised Accounting Practices

GTTPP Generic Trade Test Preparation Programme

HE Higher Education

HEAIDS Higher Education HIV/AIDS Programme

HEDCOM Heads of Education Departments Committee

HEI Higher Education Institutions

HEMIS Higher Education Management Information System

HEQF Higher Education Qualifications Framework

HESA Higher Education South Africa

HIV/AIDS Human Immunodeficiency Virus/Acquired Immunodefi-ciency Syndrome

HRD Human Resource Development

HRDCSA Human Resource Development Council of South Africa

HRDSA Human Resource Development Strategy for South Africa

HRMIS Human Resource Management Information System

HSRC Human Science Research Council

IBSA India-Brazil-South Africa

ICASS Internal Continuous Assessment

ICT Information and Communication Technology

ILO International Labour Organisation

IT Information Technology

ITIL Information Technology Infrastructure Library

INDLELA Institute for the National Development of Learnerships, Employment Skills and Labour Assessments

IPAP Industrial Policy Action Plan

LAN Local Area Network

MEDUNSA Medical University of South Africa

MIS Management Information System

MLO Media Liaison Officer

MMM Minister’s Management Meeting

MPAT Management Performance Assessment Tool

MTEF Medium Term Expenditure Framework

MTSF Medium Term Strategic Framework

NAMB National Artisan Moderation Body

NARYSEC National Rural Youth Service Corps

NASCA National Senior Certificate for Adults

NATED National Accredited Technical Education Diploma

NC(V) National Certificate (Vocational)

NDP National Development Plan

NEGP New Economic Growth Path

NGP New Growth Path

NIHE National Institute of Higher Education

NIPF National Industrial Policy Framework

NQF National Qualifications Framework

NRF National Research Foundation

2. LIST OF ABBREVIATIONS/ACRONYMS (CONTINUED)

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NSA National Skills Authority

NSDS National Skills Development Strategy

NSDSIII National Skills Development Strategy III

NSF/FUND National Skills Fund, established in terms of section 27(1) of the Skills Development Act, 1998 (Act No. 97 of 1998)

NNSF ALC National Norms and Standards for Funding Adult Learning Centres

NSF DIS National Skills Fund Disbursement Information System

NSFAS National Student Financial Aid Scheme

OAG Office of the Accountant General

ODA Overseas Development Assistance

OECD Organisation for Economic Cooperation and Development

OER Open Education Resources

OFO Organising Framework for Occupations

OQSF Occupational Qualifications Sub-Framework

PAA Public Audit Act , 2004 (Act No. 25 of 2004)

PALC Public Adult Learning Centre (see CETC)

PED Provincial Education Department

PERSAL Personnel Salary System

PFMA Public Finance Management Act, 1999 (Act No. 1 of 1999)

PIC Public Investment Corporation

PICC Presidential Infrastructure Coordinating Commission

PIVOTAL Professional, Vocational, Technical and Academic Learning

PME Performance Management and Evaluation

PQM Programmes and Qualifications Mix

PRASA Passenger Rail Agency of South Africa

PSIRA Private Security Industry Regulation Act

PSETA Public Service SETA

QCTO Quality Council for Trades and Occupations

RPL Recognition of Prior Learning

RDG Research Development Grant

SADC Southern African Development Community

SAGEN South African German Energy Programme

SAICA South African Institute of Chartered Accountants

SAIDE South African Institute of Distance Education

SAIVCET South African Institute for Vocational and Continuing Education and Training

SAMSA South African Maritime Safety Authority

SANCB South African National Council for the Blind

SANEDI South African National Energy Development Institute

SAQA South African Qualifications Authority

SARETEC South African Renewable Energy Technical Centre

SARS South African Revenue Service

SAUS South African Union of Students

SCOPA Standing Committee on Public Accounts

SCM Supply Chain Management

SDA Skills Development Act, 1998 (Act No. 97 of 1998)

SDLA Skills Development Levies Act, 1999 (Act No. 9 of 1999)

SDL Skills Development Levy

SEDA Small Enterprise Development Agency

SET Science, Engineering and Technology

SETA Sector Education and Training Authority



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SIC Standard Industrial Classification

SIP Strategic Integrated Project

SITA State Information Technology Agency

SOM School of Medicine

SPU Sol Plaatje University

SRC Student Representative Council

SSP Sector Skills Plan

SSS Student Support Services

STI Sexually Transmitted Infection

TB Tuberculosis

TDG Teaching Development Grant

TVET Technical and Vocational Education and Training

TWG Technical Working Group

UCCF University Council Chairs Forum

UIF Unemployment Insurance Fund

UMP University of Mpumalanga

UN United Nations

UNESCO United Nations Educational, Scientific and Cultural Organisation

UoT University of Technology

VCET Vocational and Continuing Education and Training

WAN Wide Area Network

WIL Work Integrated Learning

WITS Witwatersrand University

WSU Walter Sisulu University



3. STRATEGIC OVERVIEW

3.1. Our vision

Funding to skill our nation.

3.2. Our mission

To provide funding for national skills development towards a capable workforce

for an inclusive growth path.

3.3. Our seven values

The National Skills Fund upholds the following seven values:

Passion

Integrity

Collaborative

Accountability

Service Excellence

Objective

Developmental

3.4. Strategic outcome oriented goals

The strategic goal of the NSF is to provide funds to support projects that are

national priorities in the National Skills Development Strategy (NSDS), that

advance the Human Resource Development Strategy (HRDS) of South Africa and

that support the National Skills Authority in its work.

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4. LEGISLATIVE AND OTHER MANDATES

4.1 Established in terms of the Skills Development Act

The National Skills Fund was established in 1999 in terms of section 27 of the Skills

Development Act, 1998 (Act No. 97 of 1998).

The money in the fund may be used for the primary objectives as defined by the

prescripts of the Skills Development Act, namely:

1. To fund projects identified in the national skills development strategy as national

priorities (section 28(1) of the Skills Development Act);

2. To fund projects related to the achievement of the purposes of the Skills

Development Act as the Director-General determines (section 28(1) of the Skills

Development Act);

3. To administer the Fund within the prescribed limit (section 28(3) of the Skills

Development Act). Regulations to prescribe the limit for the administration

of the Fund at 10% of revenue has been approved and published in

Notice No. R.1030, Government Gazette No. 33740 dated 8 November

2010; and

4. To fund any activity undertaken by the Minister to achieve a national standard

of good practice in skills development (section 30B. of the Skills Development

Act).

The current main revenue sources for the National Skills Fund are:

1. 20 percent of the skills development levies as contemplated in the Skills

Development Levies Act, 1999 (Act No. 9 of 1999);

2. Interest earned on investments held at the Public Investment Corporation; and

3. Uncommitted surpluses from the SETAs that are transferred to the NSF in terms

of SETA grant regulation 3(12).

The National Skills Fund may also receive revenue from the following sources:

1. The skills development levies collected and transferred to the Fund, in terms

of the Skills Development Levies Act, 1999 (Act No. 9 of 1999), in respect of

those employers or sectors for which there are no SETAs;

2. Money appropriated by Parliament for the Fund;

3. Donations to the Fund; and

4. Money received from any other source.

4.2 Retention of accumulated surplus

In terms of section 29(3) of the Skills Development Act, 1998 (Act No. 97 of 1998),

the unexpended balance in the Fund at the end of the financial year must be carried

forward to the next financial year as a credit to the Fund.

4.3 Listed as a Schedule 3A public entity in terms of the PFMA

On 12 October 2012, the Minister of Finance listed the National Skills Fund

as a Schedule 3A public entity in terms of the Public Finance Management Act,

1999 (Act No 1. of 1999) (PFMA), retrospectively effective from 1 April 2012

(Notice number 821 in Government Gazette No. 35759). Prior to the listing as a

public entity, the National Skills Fund operated as a programme under the Skills

Development Branch of the Department of Higher Education and Training (DHET).

4.4 Key legislation applicable to the NSF

The following key pieces of legislation are applicable to the NSF:

1. Skills Development Act, 1998 (Act No. 97 of 1998), as amended;

2. Skills Development Levies Act, 1999 (Act No. 9 of 1999), as amended;

3. Public Finance Management Act, 1999 (Act No. 1 of 1999), as amended and

Treasury Regulations; and

4. Public Service Act, 1994 (Act No. 38 of 1994), as amended.

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5. ORGANISATIONAL STRUCTURE

5.1 Executive Officer’s Office

Front row left to right: Dineo Lehula, Mvuyisi Macikama, Bongiwe Sipengane Back row left to right: Tebogo Selepe, Alpheus Mathulachipi

Mr. M Macikama

EXECUTIVE OFFICER


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5.2 Bursaries

Front row from left to right: Mahlodi Mashao, Theresia Mmola, Dineo Masomane, Bagcinile Khumalo, Sindiswe MphangwaBack row from left to right: Norman Sithole, Dumo Zongo, Mirriam Mosethle, Conny Khambako, Nditsheni Ramakokovhu, Thabang Sephai


Ms. C Khambako

DEPUTY DIRECTOR:

BURSARIES

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5.3 Strategic projects

Mr. E Mashabane

DIRECTOR:

STRATEGIC PROJECTS

Front row left to right: Lerato Tema, Nomusa Dlamini, Eubert Mashabane, Nyandano MukwevhoBack row left to right: Nokuthula Mbatha, Elsabe Horton, Drobby Matsimane, Phumudzo Ramawa, Humphrey Masemola, Mahlodi MashaoAbsent: Kenneth Maluleka, Mavis Gijima, John Zulu, Joe Magabane, Lindiwe Gwebu, Shelly Mkhesa, Morithi Makina

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5.4 Skills support programmes

Mr. F Strydom

DIRECTOR:

SKILLS SUPPORT PROGRAMMES

Front row from left to right: Claudia Mboya, Slindile Nkiwane, Frans Strydom, Zandile Mahlaba, Maureen RannyameBack row from left to right: Buntu Msengi, John Nchabeleng, Thandeka Maduna, Gerrit Ferreira, Bongani Mkhize, Shaafig FredericksAbsent: Gideon Sauls, Lusani Shavhani

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Mrs. KF Hlongwane

DIRECTOR:

PROVINCIAL OPERATIONS

5.5 Provincial operations

Front row left to right: Lydia Mathagu, Mabel Malatji, Tendani Moila, Kgaugelo Hlongwane, Ivy Mahoko, Mirriam MaleboBack row left to right: Eliphus Sako, Sidwell Ndyenge, John Dihashu, Humphrey Manzini, Ian Moloisi, Njabulo SitholeAbsent: Edgar Motlhabane, Ramakwale Boshielo, Clement Nkuna, Sinovuyo Fikeni, Hellen Sebopetsa, Londiwe Twumasi



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5.6 Finance and administrationMr. W Minnie

CFO

Mrs. S Theron

DIRECTOR FINANCE

Front row left to right: Sanel Theron, Bridgette Setuki, Nyawa Dikwayo, Wean Minnie, Mary Monosi, Edwish NkunaMiddle row left to right: Phumzile Maleka, Rietjie Souwitzsky, Lehlogonolo Seaga, Rina Koen, John Magoro, Karuwani TshivhaseBack row left to right: Thabo Mogotshane, Bridgette Siwada, Belinda Bouwer, Claudette Grobler, Cecilia Pieterse, Kgaugelo Tjale Absent: Marinda Ferreira, Ansa Smit



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n6. FOREWORD BY THE MINISTER

It is with great pleasure that I present the 2014/15 annual report of the National

Skills Fund (NSF) to the education and training stakeholders and the nation as a

whole.

The year under review was characterised by a much more strategic approach

in utilising the NSF, with all funds allocated and disbursed towards initiatives

aligned to government strategies and priorities. The approach is underpinned by

support for the development of scarce skills, identifying and resolving blockages

in the skills development system whilst improving and strengthening the capacity

of an integrated post-school education and training system. Other initiatives

include funding programmes for youth development, building small business,

rural development, and work integrated learning that seeks to bring industry and

business closer to post-school education and training institutions by providing work

experience for the youth.

The NSF is an integral part of our vision for an efficient and effective post-school

education and training system. The Fund is characterised in the National Skills

Development Strategy as a “catalytic fund” that seeks to unlock additional resources

needed to improve the economic, cultural and social life of our people. The NSF

continues to serve as a national resource, used to initiate as well as to respond

to national skills priorities. It continues to target gaps and complement resource

shortages for key national priorities.

In support of the White Paper on post-school education and training and the

National Skills Development Strategy (NSDS III), the NSF is geared to take up a

much greater supporting role for public institutions such as universities, universities

of technology, TVET colleges as well as other newly envisaged institutional forms

such as community colleges, without stifling the innovation and strengths that the

private sector may offer.

As a result of the NSF’s interventions we have witnessed a significant increase in

access to higher education institutions and TVET colleges, as well as growth in

the number of relevant programmes offered by these institutions. We believe that

the SETAs also have a role to play in building capacity of this important public

machinery for education and training.

To increase its operational effectiveness and efficiency, the NSF has had to

strengthen its internal capacity. Much work was completed in this regard under

the auspices of the Siyaphambili project. The Fund is currently in the process of

finalising a revised structure, based on the most efficient and effective operating

models available, that would enhance service delivery, reporting, monitoring and

evaluation. Critical to this model will be the ability to continuously evaluate the

impact of the NSF’s contribution towards skills development in the country.

DR BE NZIMANDE, MPMinister of Higher Educationand Training



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The NSF has once again achieved an unqualified audit opinion, reflecting good

governance through effective oversight by the departmental leadership.

Last but not least, I extend my sincere gratitude to the Deputy Minister of

Higher Education and Training, Mr Mduduzi Manana, the Director-General,

Mr Gwebinkundla Qonde, who is the Accounting Authority of the NSF, and the

NSF management and staff for their dedication and hard work in uplifting our

communities through skills development.

DR BE NZIMANDE, MP

MINISTER OF HIGHER EDUCATION AND TRAINING


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7. FOREWORD BY THE DEPUTY MINISTER

As part of a family of DHET institutions, the NSF is fully committed to supporting

the integrated post school education and skills development landscape. In 2014,

the Minister launched and declared 2014-2024 as the decade of the artisan,

with the sole aim of creating a pipeline of qualified artisans to grow the emerging

sectors of our economy, especially manufacturing, and create massive employment

opportunities for our youth. The work of elevating the status and profile of artisans

in the country and promoting the TVET colleges as institutions of first choice is

on track. We continue to engage with employers to open up their workplaces

for artisan learners to gain workplace exposure. To further build impetus on the

artisan development work, South Africa, will this year, participate in the World

Skills International Competitions for the first time as a fully-fledged affiliate to World

Skills International.

The NSF has partnered with state-owned companies (SOCs), previously known

as parastatals, that have traditionally been a significant source of artisan training

and development for the country, to train beyond their operational training and

skills needs. The SOCs tended to focus on training artisans for their own internal

operational needs. Following the Memorandum of Understanding (MoU) signed

between DHET and DPE and with financial support from the NSF, SOCs have

been called upon to leverage their existing capabilities and facilities to increase

the number of qualified artisans in the country. The work has begun to yield fruitful

results. The investment made by the NSF in infrastructure, equipment, and training

is a sustainable one and will support the delivery of artisans into the future in

line with the New Growth Path, Skills Accord and Industrial Policy Action Plan

strategies of government.

The Fund will continue to look for opportunities to scale up artisan development. To

date the Fund has begun discussions with private sector and business formations

in collaboration with National Artisan Moderating Body to institutionalise artisan

development within TVET Colleges. These efforts include implementation of a few

pilots such as the Dual System Apprenticeship Programme (DSAP) which is an

integrated training system that includes theory and workplace training targeting

NCV L2. The DSAP system will pilot the plumbing and electrician qualifications.

The pilot is expected to yield fruitful results with more dedicated and focused

learners who are more prepared for the workplace.

The DHET, with support from the NSF, partnered with the private sector to pilot

the Generic Trade Test Preparation Programme (GTTPP) which was designed to

prepare learners in TVET Colleges for apprenticeship. We will continue to support

and harness the lessons learnt from the GTTPP with the anticipation of eventually

rolling it out to all the TVET colleges in the country.

As the department we also intensified the internship programme. In the

2014/15 financial year, the department appointed over 130 interns from

universities and colleges and has appointed another 160 over the 2015/16

financial year. We continuously urge other government departments and portfolio

MR MC MANANADeputy Minister of Higher Education and Training


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agencies and entities as well as the private sector to intensify their efforts in respect

of interns and especially consider taking up interns from our TVET colleges.

The Higher Education AIDS programme is continuing to implement comprehensive

programmes that respond to the impact of the dual epidemics (HIV, STIs and TB) in

the higher education and training sector. First Things First is a major programme

of the Higher Education and Training HIV/AIDS Programme (HEAIDS). Now in its

fifth year, First Things First speaks to the priority for South Africans to look after

their health and encourages, particularly youth, to know their HIV status, screen

for and treat STIs and TB.

The Apply Now Campaign is a flagship programme which is aimed at encouraging

learners to apply on time for admission to post-school institutions and thus avert

possible stampedes and long queues that take place at the beginning of each

academic year. The career guidance component of the campaign seeks to inform

learners about career choices available within the Post-School Education and

Training (PSET) sector. The catalytic investment by the NSF in the development

of a comprehensive career advisory service, initially incubated at SAQA, has

seen an enormous improvement on the learner behaviour towards their post-school

education. Increased applications for enrolments at both universities and TVET

colleges in the past few years are one such concrete improvement.

As the department we continue to support students with disabilities, and the

implementation of the Social Inclusion Policy Framework which advocates for

the establishment of disability units in all post-school education and training

institutions, in order to facilitate easy access by students with disabilities. Through

the NSF, the department also allocates, on an annual basis, bursary funding

that targets learners with a disability of one or another kind, to meet full cost of

study, including assistive devices, in order to provide enabling environment for the

affected learners.

I wish to thank the Minister of Higher Education and Training, Dr BE Nzimande for

his sterling leadership, support and guidance, the Director General, Mr GF Qonde,

the NSF management and staff for their hard work and unwavering support.

MR MC MANANA

DEPUTY MINISTER OF HIGHER EDUCATION AND TRAINING


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8. FOREWORD BY THE DIRECTOR-GENERAL OF HIGHER EDUCATION AND TRAINING AS THE ACCOUNTING AUTHORITY

The National Skills Fund (NSF) will continue to be responsible for skills development

aligned to national development strategies and priorities. The National

Development Plan (NDP) recognises education as a key tool to South Africa’s long-

term economic prosperity and as an investment in its future.

To that end, the NSF, through the Bursary unit, is engaged in a number of strategic

projects aimed at either creating capacity within our partner higher education

institutions through capital and/or seed funding, or supporting programmes that

address the shortage of high-demand skills by means of scholarships and full

bursaries.

In the last financial year, the NSF, as a catalytic fund, assisted the state to drive

key skills shortages to better the economy by providing access to education

opportunities and skills to over 13 000 financially and academically deserving

under-graduates and over 1 900 post-graduates. The NSF continues to provide the

all-round support to financially and academically deserving students in scarce and

critical skills disciplines. The NSF allocated funding through its partnerships with

the National Student Financial Aid Scheme (NSFAS) and the National Research

Foundation (NRF) to students who are academically deserving and in need of

finances to pursue their careers.

As stated in the NDP, South Africa needs to develop and strengthen collaboration

with other education systems in the English-speaking world and the BRIC countries

(Brazil, Russia, India and China) to ensure that students from the South African

education system are equipped to be admitted into those systems. International

collaboration in education will help South Africa to successfully tackle its education

challenges. Stronger educational links with these countries will also help students

to become increasingly broadminded in terms of how they look at both South

Africa and the wider world. It is for this reason, that the NSF has embarked on

different initiatives in order to fulfil this much needed international exposure of

South Africa’s youth to a broad spectrum of education opportunities beyond the

borders.

We therefore share and highlight some of the milestones and achievements

recorded during the 2014/15 financial year.

South African Maritime Safety Authority (SAMSA)

During 2013/14 and 2014/15, the NSF supported 23 candidates to pursue

Masters’ programmes and four PhD programmes in marine related fields at

the World Maritime University in Malmo, Sweden. 23 MSc candidates have

successfully completed their programmes and graduated in November 2014 with

MR GF QONDEDirector-General ofHigher Education and Training

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one candidate being awarded the Chancellor’s medal for academic excellence

(Malmo).The four PhD candidates are progressing very well in their academic work.

This initiative is in keeping with the emerging country’s focus on the development

of the ocean economy.

International Scholarships

R15.3 million was committed towards international skills disciplines. During

2014/15, 97 students benefitted from these international scholarships to study

various scarce skills programmes in China, Russia and India.

The South African Institute of Chartered Accounts (SAICA) programmes: University of Fort Hare/University of Limpopo and the University of the Western Cape

The NSF provided bursary funding to the above institutions with the view to

develop and assist financially needy and deserving students and also provide a

well-resourced platform to act as a catalyst to skills development initiatives in the

accounting profession. During 2014/15, 462 students benefited from bursaries

funded by NSF through these initiatives. The NSF is committed to continue funding

financially needy and academically deserving students in scarce skills programmes

that are aligned to the plans of the NDP 2030.

A breakdown of the 2014/2015 allocations is as follows:

Through the NSFAS, the NSF made the following allocations:

• 13 145 students benefitted from the NSF bursaries targeting scarce and

critical skills programmes and bursaries for people living with disabilities.

This includes 99 bursaries that were awarded in the NSF TVET lecturer

development programme for study towards the national professional diploma

in education. R911.966 million was allocated towards these programmes,

targeting financially needy and academically deserving students in 26

universities.

• 1 974 students benefitted through the NSF post graduate programme in

scarce skills disciplines. An allocation of R162.803 million was made through

a partnership with the National Research Foundation (NRF).

• R18 million was committed to the National Institute for Humanities and Social

Science (NIHSS) to benefit 123 PhD students for studies in humanities and

social sciences.

In summary, more than 15 000 students benefitted from the R1.074 billion that

was funded towards bursaries in 2014/15.

Finally, I wish to thank the Minister of Higher Education and Training,

Dr BE Nzimande and the Deputy Minister, Mr M Manana for your continuous

support and leadership. I would also like to thank the department, NSF leadership

and staff for your great enthusiasm and hard work throughout the years to fulfil the

goals of the NSF.

MR GF QONDE

DIRECTOR-GENERAL OF HIGHER EDUCATION AND TRAINING

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9. EXECUTIVE OFFICER’S OVERVIEW

The National Skills Fund (NSF) was established in terms of the Skills Development

Act, 1998 (Act No. 97 of 1998) and in terms of the Act, the Fund should be used

for the following:

• Projects that are identified in the National Skills Development Strategy (NSDS)

as national priorities;

• Projects related to the achievement of the purposes of the Act as determined

by the Director-General; and

• The administration of the Fund within the prescribed limit.

The Fund is also guided by its broad mandate of investing in education and skills

development as well as its catalytic funding role as directed by the National Skills

Development Strategy III (NSDS III). Its key strategic role is in enabling the state

to drive key skills development strategies as well as meeting the training needs

of the unemployed, non-levy paying cooperatives, non-government organisations

(NGOs), community structures and vulnerable groups.

NSF is therefore fully responding to Outcome 5 of government’s performance

outcomes which talks to “A skilled and capable workforce to support an inclusive

growth path”.

In support of Outcome 5, the broad category of national priorities that received

funding during this financial year, which will be detailed in this annual report

include:

• Priorities identified that advance the human resource strategy (HRS) as

identified and decided by the Human Resource Development Council (HRDC);

• Priorities identified by the Minister in consultation with the National Skills

Authority (NSA) aimed at strengthening the skills development capacity;

• Projects that are aligned with the NSDS, National Development Plan (NDP),

New Economic Growth Plan (NEGP), Industrial Policy Action Plan (IPAP), skills

to support green economy, rural development, skills development in education

and health, the SIPs and to contribute towards capacity building and skills

development for institutions operating in the post-school system.

In its roll out of different initiatives and interventions, the NSF sought to promote

strategic partnership and innovation in project delivery, driving change towards

partnership-based programmes that contribute significantly in raising the low base

of education and training in our country, as guided by government policies of

redress and promotion of equity. Interventions ranged from those targeting rural

youth, in which the NSF partnered with the Department of Rural Development

and Land Reform, through the National Rural Youth Service Corps (Narysec)

programme, to those targeting out-of-school youth in need of skills intervention

in order to participate in economic activities brought about by the Expanded

Public Works Programme (EPWP), and those targeting unemployed graduates, in

MR MV MACIKAMAExecutive Officer


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which the NSF partnered with the Department of Trade and Industry (DTI) for their

placement in companies benefiting from government incentives.

The NSF has also contributed significantly towards the National Development Plan

(NDP) targets relating to the Post-School Education and Training system (PSET).

The targets supported through the NSF include, amongst others, the drive to

increase the participation rates in the Technical and Vocational Education and

Training (TVET) college system to 25% and creating learning opportunities through

Community Colleges and private provisioning institutions.

To date, the NSF expended over R1.5 billion of the budgeted R2.5 billion in

the TVET colleges sector programme expansion and capacity building, resulting

in increase in the college sector enrolment for the past 2 years. This College

expansion and capacity building rollout has and continues to provide the post

school system with important lessons, especially in the area of industry and college

partnerships and collaboration. This industry/college collaboration is regarded as

a defining feature of the TVET College system that we are all building.

In addition to its contribution to the TVET college system, the NSF invested R3.2

billion in skills development during the 2014/15 financial year which represents

an increase in skills development investment compared to the investment in the

previous financial year (2013/14: R3.137 billion). 62 617 beneficiaries were

trained in the same period. The majority of these learners are still receiving training,

some of whom will only complete in 2016. The NSF is committed in funding these

learners over the entire period of their study.

In order to respond to the transformational challenges that the organisation finds

itself, the NSF launched Siyaphambili (which means we are going forward)

project in April 2014. The objectives of this project are to achieve efficiency and

effectiveness in business processes, capacity building as well as development of

information technology systems to enable the NSF business processes. This project

is almost in its final stages of development whereinafter implementation will go

into full swing.

The NSF will continue to strive to improve on the efficiency and effectiveness

of its operations, systems, programmes and most importantly, its monitoring and

evaluation of the allocated funding, to ensure maximum benefit to all intended

beneficiaries.

In conclusion, I would like to thank the Honourable Minister of Higher Education

and Training, Dr B.E. Nzimande, MP, the Deputy Minister Mr M.C. Manana, MP

and the Director General Mr G.F. Qonde for their leadership and unwavering

support towards a drive to extend post-school education and training opportunities

to the most destitute of the country’s youth population. The NSF management and

the staff, I thank you all for your dedication, support and sacrifices you always

displayed and for going the extra mile to educate and skill the youth of our country,

I salute you all, “Ukwanda kwaliwa ngumthakathi, Enkosi, Ndiyabulela”.

MR MV MACIKAMA

EXECUTIVE OFFICER: NATIONAL SKILLS FUND



Success Story

COLLEGE INFRASTRUCTURE PROJECTBUILDING BLOCKS FOR FUTURE TRAINING

A R2.5 billiion infrastructure project for Technical and Vocational Education and

Training (TVET) colleges is underway, and will result in 12 new TVET campuses in

rural areas in four provinces.

This investment also includes the refurbishment of four campuses.

The project is in line with the government’s National Skills Development Strategy to

promote a college system responsive to sector, regional and national skills needs

and priorities.

The new campuses are almost all in rural or semi-rural areas spread across the

Eastern Cape, KwaZulu-Natal, Limpopo and Mpumalanga and are linked to

existing TVET colleges that will take over the new campuses when built.

The Department of Higher Education and Training (DHET) is responsible for

managing the project, which started at the beginning of 2014.

The infrastructure development is financed through a R1.5 billion contribution from

the NSF and R1 billion contribution from the SETAs.

Apart from the DHET as overall project manager, assisted by professional consultants,

and the NSF as the funding coordinator, the principal agent, Masetlaoka Scott

Wilson (MSW) Consortium, supervises the various construction contractors working

at the sites.

At present, there are three active project sites -- at Thabazimbi, Nkandla A and

Bhambanana -- where construction is planned for 10 months and where some

phases were up to 90% complete by mid 2015.

At a well-attended Imbizo in Thabazimbi in July 2015, where a R138 million

campus is being built, the community expressed their pleasure at having such good

infrastructure being built for their area.


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PART B Performance Information



1. STATEMENT OF RESPONSIBILITY FOR PERFORMANCE INFORMATION

Statement of Responsibility for PerformanceInformation for the year ended 31 March 2015

The Accounting Authority is responsible for the preparation of the public entity’s

performance information and for the judgements made in this information.

The Accounting Authority is responsible for establishing and implementing a system

of internal control designed to provide reasonable assurance as to the integrity and

reliability of performance information.

The performance information reflects the actual achievements against planned

objectives, indicators and targets, as per the strategic and annual performance

plan of the public entity, for the financial year ended 31 March 2015.

The performance information of the entity set out on page 29 to page 56 was

approved by the Director-General of Higher Education and Training, as the

Accounting Authority of the National Skills Fund.

MR GF QONDE

DIRECTOR -GENERAL OF

HIGHER EDUCATION AND TRAINING

31 July 2015

2. AUDITOR’S REPORT: PREDETERMINED OBJECTIVES

The AGSA currently performs the necessary audit procedures on performance

information to provide reasonable assurance in the form of an audit conclusion.

The audit conclusion on the performance against predetermined objectives is

included in the report to management, with material findings reported under the

Predetermined Objectives heading in the Report on other legal and regulatory

requirements section of the auditor’s report.

Refer to the Report of the Auditor-General to Parliament on the National Skills Fund

(pages 87 to 88), published as Part E: Financial Information.

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MR MV MACIKAMA

EXECUTIVE OFFICER

NATIONAL SKILLS FUND


3. OVERVIEW OF THE NATIONAL SKILLS FUND’S PERFORMANCE

3.1 Service Delivery Environment

On 12 October 2012, the National Skills Fund was listed retrospectively effective

from 1 April 2012.

Since the listing of the National Skills Fund as a Schedule 3A public entity on

12 October 2012, the Fund reports on its performance against its strategic plan

and annual performance plan to relevant stakeholders, who include the following:

• The Minister and Director-General of Higher Education and Training,

through the relevant structures of the DHET. Reports of the NSF are discussed

in the DHET’s senior management meetings at various levels including a

dedicated review session with the Executive Authority. The NSF is also part

of the Annual Review and planning workshops, where annual performance

is discussed and planning of the new financial year is undertaken;

• Relevant parliamentary portfolio committees; and

• A committee of the National Skills Authority also provides monitoring with

respect to the contribution of the NSF to the targets of the National Skills

Development Strategy.

These performance reports include, amongst others, quarterly monitoring of

performance, derived from the annual performance plan of the NSF and ENE

targets and reported via Department of Higher Education and Training;

Since the dawn of the NSDS III the National Skills Fund’s performance has increased

significantly seeing the Fund’s investment towards skills development increasing to R3.2 billion (2013/14: R3.1 billion) during the current financial

year, benefiting over 62 000 learners.

The majority of these 62 000 learners are still receiving training in on-going courses

during the next financial year as their training courses extend over periods longer

than one year. The NSF remains committed towards funding these learners over

their entire qualification period. This is to ensure a maximum throughput of learners

obtaining their qualifications and preventing a high drop-out of learners from one

academic year to the next due to a lack of funding to continue studies.

The NSF’s increased performance under NSDS III can be clearly noted below:

• 1st Year of NSDS III (2011/12): Investment towards skills development

increased by 131% from R564 million to R1.3 billion;

• 2nd Year of NSDS III (2012/13): Investment towards skills development

increased by 97% from R1.3 billion to R2.6 billion;

• 3rd Year of NSDS III (2013/14): Investment towards skills development

increased by 19% from R2.6 billion to R3.1 billion; and

• 4th Year of NSDS III (2014/15): Investment towards skills development

increased from R3.1 billion to R3.2 billion.

Furthermore, the NSF has a remaining commitment of R8.3 billion towards

the various skills development projects of national priority. This high level of

commitment has strategically positioned the Fund to maintain its high level of

performance into the future.

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3.2 Organisational environment

The key organisational challenges for the National Skills Fund to overcome during

the next financial year relate to following:

• Overcoming capacity constraints in the following areas:

1. Strategic planning capacity supported by strong research and analysis

capabilities. Strategic partnerships will also be forged to ensure

integrated skills planning;

2. Dedicated brokering and facilitation capacity (also referred to as

dealmakers) that will be dedicated towards initiating skills development

initiatives aligned to the NSF’s strategic objectives and in accordance

with the required compliance frameworks;

3. Dedicated and competent evaluation capacity that will be responsible for

ongoing evaluation of outcomes and impact of NSF funded initiatives;

4. Strengthened monitoring capacity that will be responsible for monitoring

outputs throughout the execution of skills development initiatives.

ICT technology as an enabler will also support in strengthening the

monitoring capabilities of the NSF;

5. Dedicated high level finance capacity that will act as business

partners and support to the core skills development functions aimed at

strengthening financial management throughout the skills development

lifecycle at all levels; and

6. Dedicated and competent innovation and contineous business

improvement capacity that will be responsible for innovation and

continuous improvement both externally and internally to the NSF.

• Improving the efficiency of the NSF’s financial and performance information

processes and systems to ensure timely and accurate reporting. This will

be overcome through the automation of re-engineered business processes

and the implementation of technology and ICT systems as part of Project

Siyaphambili.

Project Siyaphambili is an integrated initiative aimed at improving the efficiency

and effectiveness of the NSF. This includes amongst others the following:

• Improving alignment of the organisation to its mandate;

• Optimising the NSF’s operations;

• Reviewing and optimising the NSF’s processes;

• Building, sourcing and aligning the NSF’s organisational structure;

• Building, sourcing and improving the NSF’s project support and monitoring

and evaluation capability; and

• Building and improving the NSF’s performance management, information

and reporting.

3.3 Key policy developments and legislative changes

Following publication of the National Skills Development Strategy for 2011-2016

(NSDS III), the Fund has engaged the National Skills Authority to develop the

Strategic Framework and Criteria for the allocation of funding to support NSDS III.

This Strategic Framework document was approved by the Minister and paved the

way for the National Skills Fund to fund projects under the NSDS III.

The key programmes of the NSF as set out in the Strategic Framework for the

allocation of funding are the following:

1. Supporting the priorities of the Human Resource Development Strategy of

South Africa;

2. Supporting the priorities of the Minister in consultation with the National

Skills Authority;

3. Funding National Skills Development Strategy III priorities in the following

areas:

a. New Economic Growth Path;

b. Industrial Policy Action Plan;

c. Skills to support rural development;

d. Skills for a green economy;

e. Skills for education and health;

f. Skills to support the justice sector; and

g. Support towards artisan development.

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4. Funding priorities identified by the Director-General supporting the Skills

Development Act, 1998 (Act No. 97 of 1998) in the following areas:

a. Worker Education;

b. Skills System Institution Capacity Building;

c. Trainee Lay-off Scheme; and

d. Academic profession, research and development.

5. Priorities to address skills infrastructure in the following areas:

a. Recapitalisation of public delivery infrastructure;

b. Community Education and Training Centres;

c. Skills Development Institutes; and

d. State-owned companies.

On 3 December 2012 the Minister of Higher Education and Training published

new SETA grant regulations in terms of section 36 of the Skills Development Act,

1998 (Act No. 97 of 1998) (Government Gazette 35940 Notice No. 990). As

per the new SETA grant regulations, the remaining surplus of the uncommitted

discretionary funds from the SETAs must be paid over by each SETA by 1 October

of each year into the National Skills Fund. This regulation significantly increased

the income of the National Skills Fund, especially during the first year in which the

applicable section relating to the grant regulations came into effect in 2014/15.

The White Paper for Post-School Education and Training sets out a

vision for a single, coherent, differentiated and articulated post-school education

and training system. This will result in the review of all post-school education and

training legislation and a drive towards a higher degree of integration with the

post-school education and training system.

The NSF’s current projects are aligned to the priorities as contained in the National Development Plan 2030.

3.4 Strategic Outcome Oriented Goals

The strategic objective of the National Skills Fund is to provide funds to support

projects that are national priorities in the NSDS III, that advance the Human Resource

Development Strategy (HRDS) of South Africa and that supports the NSA in its

work. The National Skills Fund’s high level of performance has resulted in the Fund

overachieving on its strategic outcome oriented goals.

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Success Story

MAJOR INVESTMENT TO ASSIST DEAF LEARNERS

The National Skills Fund’s recent R79.018 million investment is the latest in a series of moves by the government to ramp up its initiatives to assist the deaf.

The investment will go towards assisting over 500 learners’ formal training, student accommodation and learning materials, amongst others.

The project also expects to conduct aptitude tests at schools for the deaf throughout South Africa, enrol 24 artisan learners as well as 60 occupational training learners, have 60 students complete a bridging programme, establish training units, refine an open resource tool and provide theological vocational training to eight students.

The NSF estimates that the impact of the investment will reach a further 2 000 beneficiaries.

The recent funding follows an earlier investment in 2012 of R76 million which saw 226 students trained in eight occupations and more than 60% of these have been successfully placed in jobs.

This is good news for the more than 80% of deaf learners who leave school before grade 9 and are unable to access occupational or skills development because grade 9 is part of the entry criteria. Unemployment within the deaf community in excess of 90%.

The long term plans also include transforming the only private technical and vocational education college, the 134-year old National Institute for the Deaf (NID) based in Worcester in the Western Cape into a public community college. The NID comes with a formidable pedigree, having provided quality, accessible skills, distance training and job placement services.

Other partners have also contributed to education within the deaf community. A further R2.2 million investment was made by the hospitality group Compass Group, plant and

equipment company Ruwacon and various technical and vocational education and training colleges, and private colleges.

According to the NSF, these initiatives are likely to help the government make inroads into its goal of achieving its 2% disability employment target and assist deaf school leavers improve their access to education and ultimately, better work prospects.

The NSF is confident that its latest investment will contribute significantly to improving the pool of tertiary qualified disabled candidates for employment in mid to high-level jobs.

The Minister of Higher Education and Training, Dr BE Nzimande, also has high expectations for the initiative and says that the NID may want to share its expertise in this area with the rest of the continent.

The current investment term ends on 31 December 2016.


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Success Story

TACKLING TALENT SHORTAGES

The Department of Higher Education and Training (DHET) has taken responsibility to

ensure that engineering students are well equipped with workplace experience in order

to grow the country`s economy.

More than R500 million was set aside by the National Skills Fund with a view to

producing employable graduates, in line with the National Development Plan (NDP) to

produce 30 000 artisans by 2030.

According to news articles on scarce skills published in the Engineering News

(14 November 2014), the country has a shortfall of 40 000 qualified artisans against

the annual production rate of 13 000 qualified artisans.

Furthermore, student engineers who are deeply needed by the labour market are

currently undergoing intensive Engineering Development and Innovation Programmes

at the University of Johannesburg (UJ), in partnership with DHET.

The main focus of these ambitious Work Integrated Learning sessions, which were

implemented on 1 September 2012, is to assist students with various technical skills and

include a Mechanical Workshop for basic training, an Electrical Workshop for hands-

on training, general writing techniques and practices and a Theoretical Classroom to

provide training in the Occupational, Health and Safety Act.

UJ training encourages partnerships with a range of stakeholders in order to facilitate

better workplace readiness for students completing their studies in the field of

engineering.


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4. PERFORMANCE INFORMATION 2014/15

4.1 Strategic Objective 1

STRATEGIC OBJECTIVE 1: EFFECTIVE AND EFFICIENT PROGRAMME / PROJECT PREPARATIONTo be effective and efficient in funds needs analysis, project feasibility, scoping and projects selection (both proactive & reactive).

Strategic target for the NSDS III period

2011/12 to 2015/16

Strategic target for the MTEF

period 2014/15 to 2016/17

Performance Indicator

Planned Target

2014/15

Actual Achievement

2014/15

Deviation from planned

target to Actual Achievement for

2014/15

Comment on deviations

TARGET 1

1 100% of reserve funds committed

towards skills development

100% of reserve funds committed

towards skills development

% of reserve funds committed towards skills development

100% 96% Under-achieved Committed 96% of reserve funds contractually

TARGET 1 PER BUDGET CATEGORY

1.1 NSDS III: HRDSSA

100% of reserve funds committed towards skills development

% of reserve funds committed towards skills development

100% 91% Partially achieved

Commitments on some priority areas will need further attention to ensure targets are met.

1.2 NSDS III: NSA Ministerial

100% 118% Achieved

1.3 NSDS III: Government Priorities

100% 112% Achieved

1.4 NSDS III: Director-General Priorities


1.5 NSDS III: Skills Infrastructure


1.6 NSDS IV

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2011/12 to 2015/16


period 2014/15 to 2016/17


Planned Target

2014/15

Actual Achievement

2014/15


target to Actual Achievement for

2014/2015


TARGET 2

2

Commit R2.52 billion of future income towards skills development

Commit R2.52 billion of future income towards

skills development

Future income committed towards skills development

(R billion)

R2 billion R0.1 billion R1.9 billion under-achieved

The under-achievement of income in relation to commitments in advance is due to a higher than expected increase in income for the NSF and slow performance on skills projects in the TVET sector, resulting in slower commitments towards the sector as a priority growth sector. Processes are currently in process to increase the NSF's commitments towards skills development.



Commit R2.52 billion of future income towards skills development

Future income committed towards skills development (R billion)

R0.05 bn (0.01)

R1.9 billion under-achieved

The under-achievement of income in relation to commitments in advance is due to a higher than expected increase in income for the NSF and slow performance on skills projects in the TVET sector, resulting in slower commitments towards the sector as a priority growth sector. Processes are currently in process to increase the NSF's commitments towards skills development


R0.05 bn 0.02


R0.95 bn 0.34


R0.95 bn (0.22)


R0 (0.50)

2.6 NSDS IV

4. PERFORMANCE INFORMATION 2014/15 (continued)

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2011/12 to 2015/16


period 2014/15 to 2016/17


Planned Target

2014/15

Actual Achievement

2014/15


target to Actual Achievement

for 2014/2015


TARGET 3

3Plan to fund minimum 80 000 learners per

year

Plan to fund minimum 80 000 learners per year

Learners planned to be funded (number of learners)

80 000 73 803Under-

achieved by 6 197 learners

Under-achievement due to slow uptake of funding from TVET college sector specifically resulting in lower number of learners benefitting from the TVET sector





Plan to fund minimum 80 000 learners per year

Learners planned to be funded (number of learners)

65 000 63 253 Under-achieved by 1 747 learners

Under-achievement due to slow uptake of funding from TVET college sector specifically resulting in lower number of learners benefitting from the TVET sector


15 000 10 003 Under-achieved by 4 997 learners

Under-achievement due to increase in funding towards priority skills infrastructure development


3.6 NSDS IV

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37NATIONAL SKILLS FUND ANNUAL REPORT 2014/15NATIONAL SKILLS FUND ANNUAL REPORT 2014/15

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n4. PERFORMANCE INFORMATION 2014/15 (continued)4.2 Strategic Objective 2

STRATEGIC OBJECTIVE 2: EFFECTIVE AND EFFICIENT PROJECT MANAGEMENT To be effective and efficient in project management, which consists of project start up, implementation support, disbursements, monitoring, evaluation and closure.

TARGET 4


2011/12 to 2015/16


period 2014/15 to 2016/17


Planned Target 2014/15

Actual Achievement

2014/15



for 2014/2015


4 Fund 70 000 learners for training

Fund 70 000 learners for training

Number of learners funded for training (number

of learners)

70 000 62 617 7 383





Fund 70 000 learners for training by outer year

Number of learners funded for training (number of learners)

60 000 46 204 (13 796) Under-achievement due to slow uptake of funding from TVET college sector specifically resulting in lower number of learners benefitting from the TVET sector

4.4 NSDS III: DG Priorities

10 000 15 913 5 913 Over-achieved on DG priorities, especially with regard to the awarding of bursaries through NSFAS and NRF to scarce and critical skills


0 500 500

4.6 NSDS IV

Reasons for the adverse variance (63 604/70 000 = 91%)is mainly due to the slow utilisation of available funds by the TVET colleges towards occupational and vocational programme enrollments. The over-achievement on target 5 indicates that funds are efficiently disbursed by the NSF towards the training providers (including TVET colleges and NSFAS), however utilisation thereof by the TVET sector specifically remains slow


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2011/12 to 2015/16


period 2014/15 to 2016/17


Planned Target

2014/15

Actual Achievement

2014/15



for 2014/2015


TARGET 5

5 Disburse 90% of grant income received

Disburse 90% of grant income

received

Grants disbursed versus grant

income received (%)

90% 118% Over-achieved

NSF continues to disburse funds efficiently towards skills development. The effective and efficient utilisation thereof at specifically TVET college level however remains slow.



Disburse 90% of grant income received

Grants disbursed versus grant income received (%)

1% 0%Under- achieved

Savings from the HRDCSA has resulted in no additional funding being required from the NSF


1% 2% Achieved


30% 46% Achieved

NSF continues to disburse funds efficiently towards skills development. The effective and efficient utilisation thereof at specifically TVET college level however remains slow


24% 54% Achieved

5.5 NSDS III: Skills Infrastructure 34% 16%

Under- achieved

Slow progress on the TVET college infrastructure development has resulted in the under-achievement

5.6 NSDS IV



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period 2014/15 to 2016/17


Planned Target

2014/15

Actual Achievement

2014/15



for 2014/2015


TARGET 6

6Fund 80% of earmarked

infrastructure projects

Fund 80% of earmarked

infrastructure projects

Infrastructure projects funded versus projects earmarked for

funding (%)

75% 100% Over-achievedAchieved target. Planned infrastructured projects are currently funded by NSF







Fund 80% of earmarked

infrastructure projects by outer

year

Infrastructure projects funded versus projects earmarked for funding (%)

75% 100% Over-achieved

Achieved target. Planned infrastructured projects are currently funded by NSF

6.6 NSDS IV


4. PERFORMANCE INFORMATION 2014/15 (continued)4.3 Strategic Objective 3

STRATEGIC OBJECTIVE 3: EXCELLENCE IN RESOURCE MANAGEMENTThis objective aims to address strategic resource management aspects for the NSF, which is critical in achieving excellence in resource management. Resource management includes a number of areas: HR Management, Financial Management, ICT Management, Information / knowledge management, Infrastructure /

facilities management and shared logistical services management. Most of the performance indicators on these areas are operational in nature and have not been included in the strategic plan. However, those resource areas that require specific interventions that are key in the achievement of the other strategic objectives are

included in the strategic plan.

Strategic target for the NSDSIII period

2011/12 to 2015/16


period 2014/15 to 2016/17


Planned Target

2014/15

Actual Achievement

2014/15



for 2014/2015


Excellence in Human Resource Management

(HR acquisition, development, individual performance management, employee wellness)

TARGET 7

790% of key funded positions filled by each year-end

90% of key funded positions filled by each year-end

Percentage of key funded positions filled (%)

90% 100% Over-achievedAchieved target. Filled all current key positions of the NSF

TARGET 8

860% of total funded positions filled

60% of total funded positions filled

Percentage of total funded positions filled (%)

60% 88% Over-achievedAchieved target. Filled 88% of total funded positions

Excellence in Information and Communication Technology Management

TARGET 9

9Implement 60% of key ICT needs

Implement 60% of key ICT needs

Percentage of key ICT needs implemented (%)

60% 71% Over-achievedAchieved target. Implemented 71% of key ICT needs

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NATIONAL SKILLS FUND ANNUAL REPORT 2014/15 41NATIONAL SKILLS FUND ANNUAL REPORT 2014/15

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Success Story

UCT RAISING HAIR INTO SCIENCE

One of the more unusual skills development programmes financed by the National Skills Fund (NSF) is literally hair-raising.

This is a plan to establish a dedicated state-of-the-art hair testing and research laboratory by the University of Cape Town’s Division of Dermatology.

It will be a first on the African continent to train an expected 10 Master’s degree students per year in hair science and also offer medical and forensic testing services for drugs, diseases, toxins and nutrients, as well as hair cosmetic testing.

The three-year project is funded by a R6.5 million grant from the NSF for laboratory refurbishment, equipment and salaries for the lead scientist for six months and technologists and administrator for four months, and is expected to be operational by December 2017.

While it may seem a peculiar project with limited scope, it offers significant benefit, far beyond its cost.

On a wider scale, hair products are big business. In South Africa alone, it is a R1.5 billion marketplace – and that does not include hairdressing salons. At present, there are 17 international and national hair product companies in SA, 60% of which are owned by multinationals. Local companies make up only 18.1% of the total market.

On a more microscopic, scientific, level, hair is increasingly used for medical and forensic testing because, unlike blood, the intake of drugs and toxins remain detectable for as long as hair is attached to the scalp.

Medically, Africans generally suffers disproportionate hair loss, with 30% women diagnosed with alopecia, resulting mainly from using hair relaxers containing sodium hydroxide.

Hair product development for African hair is neglected globally, partly because the now 100-year-old relaxers are “cheaper than water to produce and have huge profit margins”.

Yet SA does not have a single comprehensive hair testing facility. Most multinational

companies in SA test products overseas, which do not cater for variations caused by local conditions, and only a few local companies can afford to send their products for testing to international laboratories.

The level of training of SA hair product developers is poor. They do not benefit from significant discoveries that are becoming commonplace at post-graduate levels. Product development by SA’s small and medium enterprises is uncompetitive and outdated, and still relies on subjective or salon testing.

UCT’s plan aims to boost development in hair science, and help unemployed science graduates become expert scientists. They will use hair as a substrate for testing and product development, focusing on afro-hair, and ultimately complete a Master of Science medical degree (MSc Med) in trichology and cosmetic science.The benefit of this becomes clearer when considering that a National Research Foundation call for internships for unemployed science graduates in 2011 attracted more than 1 000 applications – which in a country with skills shortages suggests a mismatch between training and market needs and the tip of the iceberg of unused trained black human capital.

At least half of UCT’s planned 10 annual graduates are expected to be economically active within a year of graduation, and apart from academic outputs, valuable patents and intellectual property is expected to be generated from the research.

In the longer term, SA-developed hair products, especially for African hair, will open up an export market and provide a greater footprint in the lucrative hair product market for locally-owned companies.

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Success Story

TRANSNET SCHOOL OF ENGINEERINGR175 million railroad to skills

A bold plan to boost the output of valuable skills from one of the biggest artisan technical training programmes in the country by a massive 50% has seen the National Skills Fund (NSF) provide financing of R175.1 million.

The idea was to supercharge training at Transnet’s School of Engineering (SoC) by 1 000 trainees a year, 56% up from its capacity of 1 800.

Based on its 45 years of experience in training with a 95% pass rate, the SoC estimated the project would add 950 qualified artisans a year to the country’s skills base.

Although not all find jobs with Transnet, qualified artisans with industrial skills are highly employable elsewhere, or can start their own businesses.

The courses offered by the SoC cover 14 high-demand industrial trades like electrical fitters, diesel electrical fitters, armature winders, turners and machinists, toolmakers, millwrights, electro mechanics, sheet metal workers, platers, blacksmiths, welders, vehicle builders and wagon fitters.

The SoC, which is part of the Transnet Academy, is ideally placed to train and develop artisans.

Its 18 campuses and trade test centres are all accredited by the Transport Education and Training Authority (TETA) and most are also accredited with the Manufacturing Engineering and Related Services Sector Education and Training Authority (MERSETA); the Media, Advertising Publishing, Printing and Packaging SETA (MAPP-SETA) and the South African Marine Training Authority (SAMTRA).

But ramping up numbers of trainee artisans is not simply a question of opening up admissions. To maintain the SoC’s ratio of one trainer to no more than 15 trainees also means hiring more trainers and support staff.

There is also a need for extra space and equipment to teach the trainees. It was estimated that more than 80% of the costs would be for new infrastructure such as classrooms, equipment and ablution blocks.

For this reason, the SoC decided to focus the project on six of its 18 centres located strategically in Germiston and Koedoespoort (Pretoria) in Gauteng, Durban in KwaZulu-Natal, Salt River in the Western Cape, Uitenhage in the Eastern Cape and Bloemfontein in the Free State.

Although the total cost of the project was estimated at R224.7 million, Transnet had already invested R38 million and committed itself to pay R11.6 million in non-taxable monthly stipends to trainees. Each trainee is paid a stipend of R1 628, R2 112, and R2 376 for phases 1, 2 and 3 of their training respectively.

All trainees are also issued with personal protective equipment and lent tools to work with which are returned once training is complete.

The NSF’s funding of the remaining R175.1 million went to equipment (R35.6 million), infrastructure (R49.8 million), staff training (R16.3 million) and trainee stipends (R73.4 million).

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5. BENEFICIARY FACTSHEET 2014/15

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NSF PARTNERSEQ

UITY

Programme or Project ManagerElectricianElectrical EngineerManufacturing Managers*Civil EngineerComputer Network & Systems Engineer Automotive Motor MechanicCarpenter and JoinerWelderPlumber (General)Personnel / Human Resource ManagerMechanical EngineerSoftware Developers*Fitter and TurnerFinance Manager

62 617TOTAL NO

OF BENEFICIARIES

divided amongst

46%

28 688 33 929

54%

2014 /15 BENEFICIARY FACT SHEET

Business Services and Admin Managers*Engineering Professionals*Electrical EngineersEarly Childhood EducatorsBuilding and Related ElectriciansHouse BuildersAccounting Associate ProfessionalsManufacturing ManagersComputer Network ProfessionalsAgri & Forestry Production ManagersAgricultural TechniciansMotor Vehicle Mechanics and Repairers Civil EngineersWelders and Flame CuttersAccountants

* not Elsewhere Classified

FUNDED

SCARCE SKILLS

TOP 15

FUNDEDOCCUPATIONS

white597

black african52 21183.4%

not declared3 7456.0%

asian1930.5%

coloured5 0638.1%

1.0%

other2920.5%

indian5160.8%

Eastern Cape

5 045

KwaZulu-Natal

11 516

North West

3 534

Free State2 541

Limpopo8 668

Western Cape

10 128

Gauteng15 980

Mpumalanga4 604

Northern Cape

601

26%

7%

16%

4%

14%

1%

8%

18%

6%

PROVINCIAL BREAKDOWN


6. PERFORMANCE INFORMATION 2013/14 (PRIOR YEAR)Pa

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STRATEGIC OBJECTIVES, PERFORMANCE INDICATORS PLANNED TARGETS AND ACTUAL ACHIEVEMENTS

Programme 1: Skills Development Funding

Development Act as per the discretion of the Director-General.

Revised strategic target for the NSDSIII period 2011/12

to 2015/16


Actual Achievement

2012/13

Planned Target

2013/14

Actual Achievement

2013/14

Deviation from

Planned Target

to Actual Achievement

for 2013/2014


1 R 14,025 billion contractually committed to fund projects that are of national priority over the NSDS III period.

Amount contractually committed to fund projects of national priority over the stipulated period.

R5,863 billion R2,4 billion R5,377 billion R2,907 billion over-achievement

The National Skills Fund’s high level of performance in committing funds towards skills development projects of

year lead to the over-achievement.

objectives ensured that funds are put to

the overall objective.

1.1 HRDSA: R 0,253 billion contractually committed to fund projects that are of national priority over the NSDS III period.


R0,055 billion R0,05 billion R0 billion R0,05 billion under-achievement

The Human Resource Development

not fully utilised its previous allocation and was rolled over to the current

allocation was not made available towards the HRDCSA during the current

earmarked towards the HRDCSA was

objectives.


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to 2015/16


Actual Achievement

2012/13

Planned Target

2013/14

Actual Achievement

2013/14

Deviation from

Planned Target


for 2013/2014


1.2 NSA MINISTERIAL: R 0,221 billion contractually committed to fund projects that are of national priority over the NSDS III period.


R0,037 billion R0,04 billion R0,033 billion R0,014 billion under-achievement

not fully utilised its prior year’s allocation and the unspent funds was rolled over

additional allocation was thus reduced with the unspent funds rolled over. The saving in funding earmarked towards the

other objectives.

1.3 NSDS III GOVERNMENT PRIORITIES: R 7,661 billion contractually committed to fund projects that are of national priority over the NSDS III period.


R4,289 billion R1,5 billion R0,652 billion R0,847 billion under-achievement

The reprioritisation funding towards the

TVET college infrastructure development has led to the under-achievement on the commitment of funding towards projects categorised under Government Priorities.

1.4 DG PRIORITIES: R 5,305 billion contractually committed to fund projects that are of national priority over the NSDS III period.



The over-achievement can mainly be attributed towards the additional R1 billion allocated towards the NSFAS shortfall.

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to 2015/16


Actual Achievement

2012/13

Planned Target

2013/14

Actual Achievement

2013/14

Deviation from

Planned Target


for 2013/2014


1.5 SKILLS INFRASTRUCTURE: R 0,585 billion contractually committed to fund projects that are of national priority over the NSDS III period.



The over-achievement can mainly be attributed towards the R2,5 billion allocated towards the TVET college infrastructure development.

2 490 projects funded over the NSDS III period by the outer year of the NSDS III period.

Number of projects funded over the relevant NSDS period by the outer year of the relevant NSDS period.

177 projects 350 projects 164 projects 186 projects under-

achieved

The NSF funded projects of higher amounts and learner numbers. Hence the NSF over-achieved on the contractual commitments target and the number of learners funded for training even though the number of projects as target was not achieved.

2.1 HRDSA: 1 project funded over the NSDS III period by the outer year of the NSDS III period.


1 project 1 project 1 project 0 projects over-achieved

Achieved target.

2.2 NSA MINISTERIAL: 39 projects funded over the NSDS III period by the outer year of the NSDS III period.



achieved

Target not achieved due to delays in contracting new NSA constituency capacity building projects. Contracting took place subsequent to year-end.


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Actual Achievement

2012/13

Planned Target

2013/14

Actual Achievement

2013/14

Deviation from

Planned Target


for 2013/2014


2.3 NSDS III GOVERNMENT PRIORITIES: 309 projects funded over the NSDS III period by the outer year of the NSDS III period.



achieved


2.4 DG PRIORITIES: 128 projects funded over the NSDS III period by the outer year of the NSDS III period.



achieved


2.5 SKILLS INFRASTRUCTURE: 13 projects funded over the NSDS III period by the outer year of the NSDS III period.



achieved



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Actual Achievement

2012/13

Planned Target

2013/14

Actual Achievement

2013/14

Deviation from

Planned Target


for 2013/2014


3 200 000 learners funded for training.

Number of learners funded for training.

95 688 learners

40 000 learners

77 913 learners

37 913 learners over-achievement



3.1 NSDS III GOVERNMENT PRIORITIES: 162 250 learners funded for training.


77 714 learners

32 450 learners

46 067 learners




3.2 DG PRIORITIES: 37 750 learners funded for training.


17 974 learners

7 550 learners 31 846 learners




4 Minimum of 70% of grants revenue received during each year disbursed as skills development grants during the year.

Percentage of grants revenue received during each year disbursed as skills development grants during the year.

100% 70% 100% 30% over-achievement

This indicator measures the NSF’s ability to put its revenue received during the

skills development grants. The dawn of the new NSDS III has facilitated

resulting in a higher commitment towards skills development projects of national priority, which resulted in

Not only have the NSF started to put its annual revenue to effective use towards skills development, but also its accumulated reserves.


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Actual Achievement

2012/13

Planned Target

2013/14

Actual Achievement

2013/14

Deviation from

Planned Target


for 2013/2014


5 Minimum of 95% of skills reserves accumulated during the year contractually committed towards skills development grants at the end of the year.

Percentage of skills reserves accumulated during the year contractually committed towards skills development grants at the end of the year.


This indicator measures the NSF ability to put its surplus accumulated during the year to effective use in the future through its contractual commitments towards skills development at year-end. The dawn of the new NSDS III has

NSF resulting in a higher commitment towards skills development grants, which resulted in improved grant disbursement

started to put its annual revenue to effective use towards skills development, but also its accumulated reserves.

6 Minimum of 70% of cumulative grants revenue received over the NSDS period disbursed as skills development grants over the NSDS period by the outer year.

Percentage of cumulative grants revenue received to date over the NSDS period disbursed as skills development grants to date over the NSDS period.


This indicator measures the NSF’s grants

dawn of the NSDS III in April 2011. The

improvement in the NSF resulting in a higher commitment towards skills development grants, which resulted in



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Actual Achievement

2012/13

Planned Target

2013/14

Actual Achievement

2013/14

Deviation from

Planned Target


for 2013/2014


7 Minimum of 95% of skills reserves accumulated over the NSDS period contractually committed towards skills development grants by the outer year of the NSDS period.

Percentage of skills reserves accumulated to date over the NSDS period contractually committed towards skills development grants at the end of the year.


This indicator measures the NSF ability to put its entire surplus accumulated surplus

use in the future through its contractual commitments towards skills development at year-end. The dawn of the new



8 Minimum of 95% of remaining skills reserves accumulated at inception of the NSDS period contractually committed towards skills development grants at the end of the NSDS period.

Percentage of remaining skills reserves accumulated at inception of the NSDS period contractually committed towards skills development grants at the end the NSDS period.


This indicator measures the NSF ability to put its surplus accumulated during prior NSDS periods to effective use in the future through its contractual commitments towards skills development at year-end. The dawn of the new



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to 2015/16


Actual Achievement

2012/13

Planned Target

2013/14

Actual Achievement

2013/14

Deviation from

Planned Target


for 2013/2014


9 Minimum of 50% of skills reserves accumulated at inception of the NSDS period disbursed as skills grants at the end of the NSDS period.

Percentage of skills reserves accumulated at inception of the NSDS period disbursed as skills grants at the end of the current year.

0% 95% 2% 93 % under-achievement

This indicator measures how the NSF started to put its surplus accumulated during prior NSDS periods to effective

The dawn of the new NSDS III has

NSF resulting in a higher commitment towards skills development grants, which resulted in improved grant

have the NSF started to put its annual revenue to effective use towards skills development, but also its accumulated reserves. The NSF only started to put its accumulated reserves from prior NSDS periods to effective use within the current

the percentage will increase in the next

meets its high commitments towards skills development.


The NSF will review the relevance of performance indicators that are not measurable.

The NSF will continue to implement its current commitments and commits towards

new national priority skills development initiatives during the 2015/16 financial

year to ensure targets related to skills development commitments are achieved and

that the NSF maintains its performance with regard to skills development grant

disbursements.

Project management at TVET college level will be strengthened to ensure that funds

are utilised more efficiently towards agreed upon deliverables.

The NSF has started with the transformation of the Fund towards becoming a more

effective and efficient organisation. This includes re-engineered business processes,

addressing capacity constraints and implementing enabling technology.

Changes to planned targets

No changes were made to planned targets during the 2014/15 financial year.

Programme Name

2014/15

Budget*

R’000

ActualExpenditure*

R’000

(Over)/Under Expenditure*

R’000

Skills Development 5 637 688 2 739 969 (2 897 719)

Total 5 637 688 2 739 969 (2 897 719)

Programme Name

2013/14

Budget*

R’000

ActualExpenditure*

R’000


R’000

Skills Development 5 662 117 3 594 317 2 067 800

Total 5 662 117 3 594 317 2 067 800

* Amounts are disclosed on the cash basis in accordance with the statement of comparison of budget and actual amounts.

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53NATIONAL SKILLS FUND ANNUAL REPORT 2014/15NATIONAL SKILLS FUND ANNUAL REPORT 2014/15

Success Story

INVESTING IN RENEWABLE ENERGY

COMPLETED: The South African Renewable Energy Technical Centre (SARETEC)

In the year 2012 government adopted an infrastructure plan that is intended to transform the economic landscape of the country. This plan is expected to create more jobs, strengthen the delivery of basic services to the public and support the integration of African countries.

Under the Presidential Infrastructure Coordinating Commission (PICC) guidance, 17 Strategic Integrated Projects (SIPs) have been developed and in announcing the national infrastructure plan, President Jacob Zuma said that the massive investment in infrastructure must leave more than just power stations, rail lines, dams and roads.

The President reiterated that the projects must generate skills and boost much needed job creation.

Subsequent to this, in September 2014, the “Skills for and Through SIPs” report was launched by the Minister of Higher Education and Training, Dr BE Nzimande in collaboration with the office of the PICC Secretariat at the Transnet Conference Centre in Esselen Park, Gauteng.

This report gives focus to among others, a list of occupations in demand for the SIPs, the bottlenecks in the supply of these skills and the steps that need to be taken to accelerate the delivery of these skills.

The establishment of SARETEC at the Cape Peninsula University of Technology (CPUT) will support, among others, the objectives of the PICC.

The Department of Higher Education and Training through the National Skills Fund (NSF) has allocated funding for the establishment of SARETEC which will be housed at the Cape Peninsula University of Technology – Bellville Campus in Cape Town.

SARETEC will be the first national renewable energy technology centre in South Africa which will deliver specialised training for the entire renewable energy industry.

The programme has also received substantial support from the German Ministry for Economic Cooperation and Development through the South African – German Energy Program (SAGEN), implemented by GIZ, the South African National Energy Development Institute (SANEDI) and GreenCape.

The overall objective of SARETEC is to ensure that the skills required to design, build, operate and maintain world class renewable energy utility power plants are available in South Africa and are adequately serviced by the educational facilities in the country and to pioneer the growth of a knowledge based renewable energy industry in the Southern African Development Community and Africa.

The facility officially opened its doors in May 2015.

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7. SUMMARY OF FINANCIAL INFORMATION

7.1 Revenue Collection

Sources of revenue

2014/15 2013/14

Budget*R’000

Actual Amount Collected*

R’000

(Over)/Under Collection*

R’000

Budget*R’000

Actual Amount Collected*

R’000

(Over)/Under Collection*

R’000

Skills Development Levies

2 687 353 2 768 542 81 189 2 407 603 2 416 365 (8 762)

Income from SETAs 560 537 2 905 050 2 344 513 0 514 581 (514 581)

Finance Income 303 226 422 992 119 766 398 982 356 893 42 089

Other Income 50 000 58 711 8 711 0 34 171 (34 171)

Total 3 601 116 6 155 295 2 554 179 2 806 585 3 322 010 (515 510)

* Amounts are disclosed on the cash basis in accordance with the statement of comparison of budget and actual amounts.

The Skills development levies received were on par with the amounts budgeted for, exceeding the budgeted by 3%. Income from SETAs exceeded the budget by R2.345

billion due to uncommitted surpluses from the SETAs being transferred to the NSF.

The income from investments increased with 39.5% mainly due to an increase in investments as a result of funding received from the SETAs towards the TVET college

infrastructure development.

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7.2 Programme Expenditure

Expenditure type

2014/15 2013/14

Budget*R’000

Actual Expenditure*

R’000


R’000

Budget*R’000

Actual Expenditure*

R’000


R’000

Skills Development 5 637 688 2 739 969 2 897 719 5 662 117 3 594 317 2 067 800

NSF Operations 268 524 143 281 125 243 207 631 85 428 117 236

Total 5 906 212 2 883 250 3 022 962 5 869 748 3 679 745 2 190 003

* Amounts are disclosed on the cash basis in accordance with the Statement of Comparison of Budget and Actual Amounts.

The actual skills development grant disbursements were 51% below budget, which can mainly be attributed to the following:

1. Delays in the appointment of construction companies to start construction on the new TVET college campuses resulted in funds not being disbursed in the current financial

year, which will be rolled over to the next financial year; and

2. There has been generally slow progress on the implementation of skills development projects with the various TVET colleges, resulting in funds not being disbursed in the

current financial year, which will be rolled over to the next financial year.

The actual expenses of R143.281 million on NSF’s operations are 46% below budget, mainly due to the delay in implementing NSF’s improved organisational structure.

The delay was deemed necessary to allow the NSF to develop an efficient and effective operating model, with re-engineered business processes, upon which the new

organisational structure will be based. It is expected that the additional posts will be filled within the next two years as part of the NSF’s organisational transformation project

(Project Siyaphambili).

7. SUMMARY OF FINANCIAL INFORMATION (CONTINUED)


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DENELWeapons of learning

Cutting edge technology is always at the forefront of innovative economic growth, and one industry where technological innovation is essential is the armaments industry.

To be competitive on the global stage of the arms trade, the very best in engineering and science knowledge and skills is a critical success factor, and is the major reason why the National Skills Fund (NSF) is helping to finance training at a state-of-the-art arms facility.

Situated in the heart of South Africa’s military complex in Centurion, Gauteng, the Denel Group, formed in April 1992 to provide the country with cost-effective and tailor-made defence solutions, has become a world-class armaments manufacturer with an enviable international reputation. It has a solid international reputation for its engineering, product development, advanced manufacturing and wider industrial base capabilities.

For more than 40 years, the Denel Technical Academy (DTA) has been the main hub for Denel to execute its commitment to youth and skills development, and the government’s artisan development drive.

DTA initially provided training skills for the aviation industry in avionics, radio, electrical and mechanics and later diversified into broader engineering trades such as toolmaking, machining, fitting, welding, electricians and millwrights. During the past decade alone, DTA has trained some 2 500 artisans at an average rate of 250 artisans a year, and also offered advanced technical training to 519 others in advanced short courses.

The company applied to the NSF for interim funding to train 124 learners in 2014 and 2015 in aircraft avionics, electrics, mechanics and structural work, as well as in general electronics, fitting and turning, machine tooling, welding and tool-making.

The NSF approved the budget of R42.5 million to train 40 learners in the 2014 intake, 72 in the 2015 intake and a further 12 learners for on-the-job training (OJT) in various related companies.

Of the planned 40 learners recruited for the 2014 intake, 38 qualified according to the means test and started training in February 2014 and were already in the system when the grant was approved.

In February 2015, 73 recruits started training, one more than planned.

For the OJT programme, 12 of 42 learners are being funded by the NSF. These learners are at present at different companies after completing theoretical training.

After a year, the NSF project has progressed according to plan with learners acquiring valuable high-technology skills without any over spending by service providers.


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PART C Governance


1. INTRODUCTION

Corporate governance embodies processes and systems by which public entities

are directed, controlled and held to account. In addition to legislative requirements

based on a public entity’s enabling legislation, corporate governance with

regard to the public entity is applied through the prescripts of the Public Finance

Management Act, 1999 (Act No. 1,1999) (PFMA) and run in tandem with the

principles contained in the King’s Report on Corporate Governance.

Parliament, the Executive Authority and the Accounting Authority of the NSF are

responsible for corporate governance.

2. PORTFOLIO COMMITTEES

For the year under review, the National Skills Fund attended the following portfolio

committee meetings:

Description Date

Presentation on the NSF’s Annual Report 2013/14

29 October 2014

Presentation on the NSF’s Strategic Plan 2015/16 to 2019/20, Annual Performance Plan 2015/16 and Budget 2015/16

27 May 2015

3. EXECUTIVE AUTHORITY

As per the requirements of the PFMA, the National Skills Fund reported quarterly

to the Minister of Higher Education and Training as the Executive Authority of the

Fund. These quarterly reports entail the reporting on the NSF’s financial status,

compliance with the PFMA and Treasury Regulations and performance information.

4. THE ACCOUNTING AUTHORITY

Introduction

The Director-General of Higher Education and Training is the Accounting Authority

of the National Skills Fund as stipulated in section 29(1) of the Skills Development

Act, 1998 (Act No. 97 of 1998).

The Director-General of Higher Education and Training is responsible for the control

of the Fund and ultimately accountable to the Minister and Parliament for the Fund’s

performance, strategic direction and money spent by the Fund.

Within the framework of the Director-General’s delegations of authority, the day-to-

day operations of the NSF are managed by the Executive Officer.

The NSF further reports through the governance structures set by the Department

of Higher Education and Training. These include the skills development branch

management meetings, the senior management meetings and the ministerial

management meetings.

The role of the Accounting Authority is as follows:

As accounting authority of the National Skills Fund, the Director-General of Higher

Education and Training has amongst others the following responsibilities to:

1. Manage the Fund in accordance with the PFMA;

2. Keep a proper record of all financial transactions, assets and liabilities of the

Fund;

3. Prepare annual financial statements for the Fund in the prescribed form;

4. Subject to the laws governing the public service, appoint the executive officer

of the Fund, who will, upon such appointment, be in the employ of the public

service;

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5. Prescribe a limit for the amount that can be used in the administration of the

Fund; and

6. Submit the annual financial statements to the National Skills Authority for

information as soon as possible after they have been prepared.

Composition of the Accounting Authority

The Director-General of Higher Education and Training, Mr Gwebinkundla Fellix

Qonde, is the Accounting Authority of the National Skills Fund as per section 29(1)

of the Skills Development Act, 1998 (Act No. 97 of 1998).

Remuneration of Accounting Authority

The Director-General of Higher Education and Training does not receive any

remuneration in his capacity as the Accounting Authority of the National Skills Fund.

5. RISK MANAGEMENT

The risk management activities of the NSF are covered within the Department of

Higher Education and Training’s comprehensive risk assessment facilitated by the

directorate: internal audit of the Department of Higher Education and Training.

6. INTERNAL CONTROL

Management has focused on improving internal control through its partnership with

the DHET in terms of the MoA with the latter as well as assistance from the internal

audit unit in DHET.

7. INTERNAL AUDIT AND AUDIT COMMITTEES

Key activities and objectives of the internal audit

The objective of the internal audit function is to provide independent, objective

assurance and consulting services designed to add value and improve the NSF

operations. It helps the NSF accomplish its objectives by bringing a systematic,

disciplined approach to evaluate and improve the effectiveness of risk management,

control and governance processes.

The main activities of internal audit are to:

• Compile three-year rolling strategic and annual audit plans;

• Perform internal audits on the following systems:

o Risk management systems;

o Control systems; and

o Governance systems.

• Report to management and the audit committee.

Audit work

The following activities as per the audit plan were completed:

• Corporate governance;

• Compliance with laws and regulations;

• Review of quarterly monitoring reports on projects;

• Audit of funding windows; and

• Audit of commitments.

Key activities and objectives of the audit committee

The objective of the audit committee is to assist the Accounting Officer in fulfilling

oversight responsibilities regarding the financial reporting process, the system of

internal control and management of risks, the audit process and the monitoring of

compliance with laws and regulations.

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• Consider the effectiveness of the internal control systems;

• Understand the scope of internal and external auditors’ reviews of internal

control over financial reporting, and obtain reports on significant findings and

recommendations together with management’s responses;

• Assess whether the departmental assets have been properly safeguarded and

used;

• Review the NSF risk profile on an annual basis and ensure management is

effectively managing the risks;

• Review the effectiveness of the system for monitoring compliance with laws

and regulations and the results of management’s investigation and follow-up

(including disciplinary action) of any instances of non-compliance; and

• Review the adequacy, reliability and accuracy of the financial information

provided to management and other users of such information and annually

review the Annual Financial Statements and recommend its approval to the

Director-General.

8. COMPLIANCE WITH LAWS AND REGULATIONS

The NSF aims to embed compliance with laws and regulations throughout its

organisation as an integral part of all relevant processes.

To assist with compliance monitoring, the NSF uses the DHET’s compliance calendar

to ensure compliance with all required documentation in terms of the PFMA and

Treasury Regulations, within legislated deadlines.

The NSF also uses the National Treasury template to assess compliance with laws

and regulations on a quarterly basis as part of the quarterly reporting process to

the executive authority.

Action plans to address non-compliance are developed and the implementation

thereof are regularly monitored.

The NSF also attends various other committee meetings to keep abreast of laws and

regulations that need to be complied with.

9. FRAUD AND CORRUPTION

The activities of the NSF are covered within the good governance policy, which

includes fraud prevention, compiled by the internal audit directorate of the

Department of Higher Education and Training.

The NSF uses the whistle-blowing policy of the DHET and shared services in terms

of the MoA with the DHET.

No cases of fraud have become known to the NSF during the last financial year.

10. MINIMISING CONFLICT OF INTEREST

Through the MoA with the Department of Higher Education and Training for shared

services, the NSF has permission from the Department of Higher Education and

Training to use its bid committees, which follow the department’s supply chain

management policy.

11. CODE OF CONDUCT

Since all NSF employees are currently employed by the Department of Higher

Education and Training, NSF employees are bound by the code of conduct of the

DHET.

12. HEALTH, SAFETY AND ENVIRONMENTAL ISSUES

The NSF is situated in the offices of the DHET. The building complies with the

necessary health, safety and environmental requirements.


13. SOCIAL RESPONSIBILITY

Not applicable to the NSF for the 2014/15 financial year.

14. MATERIALITY AND SIGNIFICANCE FRAMEWORK

The NSF prepared its materiality and significance framework which was approved

by the Director-General of Higher Education and Training as the Accounting

Authority of the NSF and submitted to the Minister for concurrence.

15. AUDIT COMMITTEE REPORT

We are pleased to present our report for the financial year ended 31 March 2015.

Audit committee members and attendance:

The audit committee was appointed during May 2014 and consists of the members

listed below. As per its approved terms of reference the audit committee should

meet at least two times per annum. During the financial year three meetings were

held.

Name of member Number of meetings attended

Prof DP van der Nest 3

Ms S Padayachy 3

Mr S Makhubu 3

Audit Committee Responsibility

The audit committee reports that it has complied with its responsibilities arising from

Section 51(1)(a)(ii) of the Public Finance Management Act and Treasury Regulation

27.1. The audit committee also reports that it has adopted appropriate formal terms

of reference as its committee charter, has conducted its affairs in compliance with

this charter and has discharged all its responsibilities as contained therein.

The effectiveness of internal control

The system of internal control is designed to provide cost-effective assurance that

assets are safeguarded and that liabilities and working capital are effectively

managed. In line with the PFMA requirements, Internal Audit and the Auditor-

General of South Africa (AGSA) provide the Audit Committee and management

with assurance that the internal controls are adequate and effective. This is

achieved by means of evaluating the effectiveness of the management of identified

risks, as well as the identification of corrective actions and suggested enhancements

to the controls and processes.

The NSF is in a period of transition and a structured project is in process to map

the way forward for the NSF. This has also contributed to the fact that the system

of internal control was not entirely effective during the year under review. Several

instances of non-compliance with internal controls were reported by both Internal

Audit and the AGSA. The Audit Committee will continue to monitor progress

against the corrective action plans implemented by management.

The system of control over the generation, collation and reporting of performance

information requires improvement. This will require a systems change to enable

better reporting on funded projects and continues to be an area of concern for the

Audit Committee.

The quality of in-year management and monthly / quarterly reports submitted in terms of the PFMA

The Audit Committee is satisfied with the content and quality of monthly and

quarterly reports prepared and issued by the Accounting Authority of the National

Skills Fund during the year under review.

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The reporting of performance information against set objectives continues to be a

cause for concern.

Evaluation of Financial Statements

The audit committee has:

• Reviewed and discussed the audited financial statements to be included in the

annual report, with the AGSA and the Accounting Officer;

• Reviewed the AGSA’s management report and management’s response

thereto;

• Reviewed changes in accounting policies and practices;

• Reviewed the NSF compliance with legal and regulatory provisions;

• Reviewed significant adjustments resulting from the audit; and

• Reviewed information on predetermined objectives to be included in the

annual report.

The audit committee concurs with, and accepts the AGSA’s conclusions on the

annual financial statements, and is of the opinion that the audited annual financial

statements be accepted and read together with the report of the AGSA. There were

material misstatements identified during the audit of the financial statements; these

were adjusted by management.

Internal audit

The audit committee is satisfied that the internal audit function is operating effectively

and that it has addressed the risks pertinent to the National Skills Fund in its audits.

Additional capacity was obtained for internal audit and they were able to complete

the audits approved in the coverage plan by the audit committee.

Auditor-General of South Africa

The audit committee has met with the Auditor-General South Africa to ensure that

there are no unresolved issues.

Conclusion

The audit committee congratulates the National Skills Fund for achieving an

unqualified audit report for the year under review. Our appreciation is also

extended to management, the Chief Financial Officer and staff for their efforts

regarding the financial statements for the year and to the team from the AGSA for

the value they continue to add to the NSF. The audit committee will monitor the

improvements made by management in addressing control deficiencies identified

by external and internal audit.

Prof D.P. van der Nest

Chairperson of the Audit Committee

31 July 2015

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Success Story

ONDERSTEPOORTVetting future food security

An urgent need to avert a potential catastrophe hitting South Africa’s agricultural industry resulted in the National Skills Fund (NSF) stepping in with R113.612 million to help increase the number of graduating veterinary scientists by 36%.

A large part of South Africa’s agricultural economy depends on healthy animals, and many rural South Africans rely on animals for survival. Veterinary science is critical in making sure the country’s valuable animal population and produce is properly managed.

Vets don’t simply treat sick animals. They are crucial in controlling animal diseases that can devastate rural communities, and also in certifying the safety of animal products for trade, both domestically and globally. Without properly trained veterinary doctors, nurses and technicians, this pillar of the country’s economy could collapse with far-reaching consequences – most especially for low-income rural communities.

A severe lack of veterinary knowledge and skills was identified as a threat to the country’s food security, protein production, public health, exports and economic growth. This resulted in a working group being set up by the Minister of Higher Education and Training, Dr Blade Nzimande, in 2010 under the chairmanship of the Vice-Chancellor and Principal of the University of Pretoria, Professor CM de la Rey. This group would look at urgently expanding veterinary science programmes, and improving the geographic and demographic distribution of vets.

The University of Pretoria headed the team because for the past 90 years, it has been the only university in the country offering a degree in veterinary science (BVSc) at its Onderstepoort campus.

The working group concluded that the number of first-year veterinary science students at Onderstepoort would need to increase by 50 students a year, from the existing 140 a year intake to 190 a year -- an increase of 36%.

Since entry standards to the degree are very high, there is little or no drop-out during the six-years BVSc degree, which meant the campus had to look at increasing its capacity to handle 300 more students after six years.

This needed a project to expand infrastructure and facilities, including new or expanded lecture rooms, laboratories, a library, and student residences. Also, expanded animal accommodation, hospital and clinic facilities to manage an increase in the number of animals (mainly horses, cattle, sheep, pigs and dogs) used for training on the campus was necessary.

All these were needed to be in place within a year of the first increased student intake.

The faculty applied to the NSF to help finance the four-year project with funding of R113.612 million, which was granted. The university undertook to continue to fund operational costs itself.

The project is on track to be completed by 2016 to help safeguard the future of South Africa’s animal agricultural economy.

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Success Story

UNIVERSITY OF PRETORIAOrdering more doctors

A chronic shortage of medical doctors has resulted in a R311 million project funded by the National Skills Fund (NSF) to increase the number of medical students at the University of Pretoria’s School of Medicine (SoM) by two-thirds.

The project will increase the number of students studying for the Bachelor of Medicine and Surgery (MBChB) degree at the university by 960 students, or 160 new students a year, to take total enrolment to 2 400.

Not a simple step. Since medical studies are so exacting, a student:staff ratio of 9:1 is acceptable and anything more than 12:1 is unacceptable. Staff have to be highly trained and top-class science facilities are needed.

But demand is huge. In 2010 alone, there were 4 300 applications for 240 new places at the school from students who met the entrance requirements, meaning more than 4 000 had to be turned away due to lack of capacity.

Unsurprisingly, with such intense competition for places and high entry standards, there is a very low drop-out rate, with 94% of all first-year students graduating with a MBChB degree.

On the other side of the equation, the need for doctors far outstrips supply.

According to a study compiled for the SA Medical Association in 2011, about 12 500 more doctors were needed urgently to staff South African hospitals.

At present, there are only about 27 640 doctors practising in South Africa serving a population of more than 50 million and the country’s eight medical schools at present only add 1 200 doctors a year, and not all of whom stay in the country.

Failure to address such a doctor shortage may result in the government’s National Health Insurance strategy, on which millions of South Africans will depend for healthcare, failing.

To address the crisis, the Minister of Health, Dr Aaron Motsoaledi, at the beginning

of 2012 challenged the Deans of South Africa’s eight medical schools to each increase student intakes by 40 a year.

In response, the University of Pretoria, which has been training doctors for 60 years, put together a plan to increase admissions to its MBChB programme from 240 to 350 from 2013, and then to 400 students a year. Over time the total increase would be 160 students a year who otherwise would have been turned away -- and four times the Minister’s challenge. To achieve this ambitious goal, the SoM’s Prinshof campus needed new lecture halls, residence space and supporting infrastructure.

The plan called for a new 400-seat lecture hall and student complex at the existing HW Snyman complex at a cost of R37.3 million with a further R19.5 million to reconfigure the complex to include a skills laboratory and extended library.

A completely new complex to include four new lecture halls and infrastructure at a cost of R158.3 million was also needed.

To accommodate the additional students, a new 300-bed residence with infrastructure and services at a cost of R95.9 million would also need to be built.

This brought the total cost to R311 million for the four-year project scheduled for completion in 2015, which the NSF granted. Operational costs are funded from increased student subsidies and fees.

Apart from increasing the intake of MBChB students, the new infrastructure developments will make it possible for the university to increase its uptake of students into other programmes as well, such as healthcare sciences and dental medicine.

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1. INTRODUCTION

The NSF’s staff establishment is currently under review as part of Project Siyaphambili.

The objective of the review is to design a new staff establishment for the NSF that

is alligned to the NSF’s new operating model, aimed at improving efficiency and

effectiveness within the NSF.

The current staff establishment under review has 144 posts of which 36 posts are

vacant. All employees of the NSF are currently employed by the DHET within the

public service as the NSF operated as a programme under the DHET prior to its listing

as a public entity on 12 October 2012. The NSF refunds the DHET for the employee

costs incurred by the DHET on behalf of the NSF.

The key human resource priority to be addressed during the next financial year

is to finalise the NSF’s new staff establishment and appoint staff in the new staff

establishment. The new staff establishment will address current capacity constraints in

a number of areas which include amongst others the following:

1. Strategic planning capacity supported by strong research and analysis

capabilities. Strategic partnerships will be forged to ensure integrated skills

planning;

2. Dedicated brokering and facilitation capacity (also referred to as dealmakers)

that will be dedicated towards initiating skills development initiatives aligned to

the NSF’s strategic objectives and in accordance with the required compliance

frameworks;

3. Dedicated and competent evaluation capacity that will be responsible for

ongoing evaluation of outcomes and impact of NSF funded initiatives;

4. Strengthened monitoring capacity that will be responsible for monitoring outputs

throughout the execution of skills development initiatives. ICT technology as an

enabler will also support in strengthening the monitoring capabilities of the NSF;

5. Dedicated high level finance capacity that will act as business partners and

support to the core skills development functions aimed at strengthening financial

management throughout the skills development lifecycle at all levels; and

6. Dedicated and competent innovation and continued business improvement

capacity that will be responsible for innovation and continuous improvement

both externally and internally to the NSF.

The NSF has made progress in the design of the organisation, aimed at improving

the effectiveness and efficiency of the NSF. This process included a review of the

entire organisation to ensure efficient workforce planning, which will result in

an intensive recruitment campaign to attract and recruit a skilled and capable

workforce to address the current capacity constraints.

All employees are required to sign performance agreements with their immediate

supervisors, which are assessed quarterly and annually. The NSF’s performance

management framework will be reviewed as part of improving the Fund’s operations.

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Success Story

OPTIMA COLLEGESkilled direction for the blind

The trauma of going blind can happen to anyone – either through accident, crime or health reasons like diabetes or glaucoma. And when it happens the person has to learn a whole new set of skills on how to survive.

The South African National Council for the Blind (SANCB), with R20.513 million in assistance from the National Skills Fund (NSF), is setting up a special further education and training (FET) centre in Gauteng to help visually impaired learn those skills.

Optima FET College seeks to benefit 190 students from designated disadvantaged groups in the three-year project funded by the NSF, 98% of whom would be black African, evenly distributed between men and women.

Many who suffer visual impairment, especially from disadvantaged backgrounds, struggle to obtain a post-matric qualification because few colleges are able to accommodate them. In fact, without skills, finding a job or being able to generate an income, is almost impossible.

The last census counted more than a million visually impaired South Africans, with hundreds of adults going blind every year who need to relearn skills they had taken for granted. This results in a cripplingly high rate of unemployment for the blind.

Optima College aims to establish itself as an education and training institution of the highest standard. The project involves the physical upgrade of the college and implementing suitable curriculum and programmes for visually impaired learners.

The project scope is to offer five accredited courses (levels 2 to 4), which have been adapted for persons with visual impairments. The programme started in 2014 with an intake of 50 learners, with 70 learners being admitted for 2015 and a further 70 admissions scheduled for 2016.

The budget of R20.513 million covers staff costs, training materials, accommodation, learner tools, infrastructure and other equipment for the three years.

One course will offer end-user computing skills (levels 2 and 3) and accommodate 10 learners every six months. A total of 60 graduates will graduate after three years.

The contact centre and support course (level 2) is a six-month theory course followed by another six months of practical training in a centre. Twenty learners will complete each year for three years, resulting in a total of 60 graduates.

A third course in business administration (level 4) will accommodate 10 learners a year for three years resulting in a total of 30 graduates.

A year-long course in music and sound technology (level 4) will run for two years with 10 graduates completing each year. This will produce a total of 20 graduates.

The fifth course, an introduction to media studies and journalism (level 4), plans to produce 10 graduates a year for two years which should result in a total of 20 graduates.

In addition to the courses, all 190 learners planned for the project over the three years go through training on social skills, job hunting skills, basic communication, orientation and mobility, and sport and recreation.

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2. HUMAN RESOURCE OVERSIGHT STATISTICS

Personnel cost by programme

ProgrammeTotal expenditure for the

entity(R’000)

Personnel expenditure (R’000)

Personnel expenditure as a % of total expenditure

(R’000)No. of employees

Average personnel cost per employee

(R’000)

Skills Development 3 258 124 29 229 0.9% 95* 308

*95 includes 72 permanent employees, 20 interns and 3 contract posts

Personnel cost by salary band

Level Personnel expenditure(R’000)

% of personnel expenditure to total personnel cost

(R’000)No. of employees

Average personnel cost per employee(R’000)

Top management 7 012 24.0% 6 1 169

Senior management 7 866 26.9% 20 393

Skilled 14 351 49.1% 69* 208

Semi-skilled 0 0 0 0

TOTAL 29 229 100% 95 308


Performance rewards

Programme Performance rewards (R’000) Personnel expenditure(R’000)

% of performance rewards to total personnel cost

(R’000)

Top management 4 7 012 0.06%

Senior management 20 7 866 0.25%

Skilled 7 14 351 0.05%

Semi-skilled 0 0 0.00%

TOTAL 31 29 229 0.11%

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2. HUMAN RESOURCE OVERSIGHT STATISTICS (CONTINUED)

Training costs

Directorate/ Business Unit Personnel Expenditure(R’000)

Training Expenditure(R’000)

Training Expenditure as a % of Personnel Cost

NSF staff establishment 29 229 329 1.13%

Employment and vacancies

Programme 2013/14 No. of Employees 2014/15 Approved Posts 2014/15

No. of Employees2014/15 Vacancies % of vacancies

Skills development 58 144 95 36 25%

Programme 2013/14 No. of Employees

2014/15 Approved Posts

2014/15No. of Employees

2014/15 Vacancies % of vacancies

Top management 5 6 6 0 0%

Senior management 12 21 20 1 0.7%

Professional qualified 0 0 0 0 0%

Skilled 41 117 69* 71 49.3%

Semi-skilled 0 0 0 0 0%

Unskilled 0 0 0 0 0%

TOTAL 58 144 95 72 50%

*69 includes 46 permanent employees, 20 interns and three contract posts

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Employment changes

Salary Band Employment at beginning of period Appointments Terminations Employment at end of the

period

Top management 5 1 0 6

Senior management 12 8 0 20

Professional qualified 0 0 0 0

Skilled 41 30 2 69*


Unskilled 0 0 0 0

Total 58 39 2 95


Reasons for staff leaving

Reason Number % of total no. of staff leaving

Death 1 1%

Resignation 0 0%

Dismissal 0 0%

Retirement 0 0%

Ill health 0 0%

Expiry of contract 0 0%

Other 1 1%

Total 2 2%

Disabled staff

LevelsDISABLED STAFF

Male Female

Top management 0 0

Senior management 0 0

Professional qualified 0 0

Skilled 0 1

Semi-skilled 0 0

Unskilled 0 0

TOTAL 0 1

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Equity target and employment equity status (current)

LevelsMALE

African Coloured Indian WhiteTop management 2 0 0 2



Skilled 24 0 0 1


Unskilled 0 0 0 0

TOTAL 34 2 0 3

LevelsFEMALE

African Coloured Indian WhiteTop management 1 0 0 1



Skilled 37 0 0 7


Unskilled 0 0 0 0

TOTAL 47 0 0 9

Labour relations: misconduct and disciplinary action

Nature of disciplinary Action Number

Verbal warning 0

Written warning 0

Final written warning 0

Dismissal 0

TOTAL 0

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Success Story

COMMUNITIES-GOVERNMENT FASHION INNOVATIVE PARTNERSHIP TO CREATE JOBS

South Africa’s National Skills Fund (NSF) has invested close to R7 million into fashion training through an innovative collaboration with communities.

The Fund, which is a division of the Department of Higher Education and Training (DHET), says the project will help develop scarce skills in women and youth of Gauteng.

And it was fashion entrepreneur, Caroline Laketi, who saw the possibilities - a fashion enterprise that could help disadvantaged youth and women of Johannesburg and Pretoria to improve their lives by creating sustainable livelihoods.

The Fund says since its start in 2012, the project has resulted in 16 active cooperatives that are successfully making waves in the fashion industry, providing business services such as fashion design, events management and interior design.

This follows the transfer of skills which include the understanding the clothing and manufacturing process, business management, accounting, english and facilitator training. Other life skills training include life support, HIV/AIDS and first aid.

What’s more is that these skills were identified by communities, and are skills for which they have a passion, can help grow the disadvantaged communities in which they live as well as grow the country’s economy.

And for this reason, the NSF believes that its collaboration with communities has resulted in a dynamic partnership which is testament that government and ordinary people, who have compelling ideas and are sustainable, can collaborate for success.

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PART E Financial Information

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1. STATEMENT OF RESPONSIBILITY

STATEMENT OF RESPONSIBILITY FOR THE ANNUAL FINANCIALSTATEMENTS FOR THE YEAR ENDED 31 MARCH 2015

As the Accounting Authority I am required by the Public Finance Management Act of South Africa, 1999 (Act No. 1 of 1999) (PFMA), to maintain adequate accounting records and I am responsible for the content and integrity of the Annual Financial Statements and related financial information included in this report. It is my responsibility as the Accounting Authority to ensure that the Annual Financial Statements fairly present the state of affairs of the entity as at the end of the financial year and the results of its operations and cash flows for the period then ended. The external auditors are engaged to express an independent opinion on the Annual Financial Statements and were given unrestricted access to all financial records and related data.

The Annual Financial Statements have been prepared in accordance with Standards of Generally Recognised Accounting Practice (GRAP) and in accordance with the PFMA.

The Annual Financial Statements are based upon appropriate accounting policies consistently applied and supported by reasonable and prudent judgements and estimates.

As the Accounting Authority I acknowledge that I am ultimately responsible for the system of internal financial control established by the entity and place considerable importance on maintaining a strong control environment. To enable me as the Accounting Authority to meet these responsibilities, I as the Accounting Authority ensure that standards for internal control aimed at reducing the risk of error in a cost effective manner are set. The standards include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk. These controls are monitored throughout the entity and all employees are required to maintain the highest ethical standards in ensuring the entity’s business is conducted in a manner that in all reasonable circumstances is above reproach. The focus of risk management in the entity is on identifying, assessing, managing

and monitoring all known forms of risk across the entity. While operating risk cannot be fully eliminated, the entity endeavours to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within predetermined procedures and constraints.

As the Accounting Authority I am of the opinion, based on the information and explanations given by management that the system of internal control provides reasonable assurance that the financial records may be relied on for the preparation of the Annual Financial Statements. However, any system of internal financial control can provide only reasonable, and not absolute, assurance against material misstatement.

As the Accounting Authority I have reviewed the entity’s cash flow forecast for the year to 31 March 2015 and in the light of this review and the current financial position, I am satisfied that the entity has or has access to adequate resources to continue in operational existence for the foreseeable future.

The external auditors are responsible for independently auditing and reporting on the entity’s Annual Financial Statements.

As the Accounting Authority, I hereby approve the Annual Financial Statements set

out on pages 91 to 187, which have been prepared on the going concern basis:

MR GF QONDEDIRECTOR-GENERAL OF HIGHER EDUCATION AND TRAININGACCOUNTING AUTHORITY OF THE NATIONAL SKILLS FUND

31 July 2015

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2. REPORT OF THE EXECUTIVE OFFICER2. REPORT OF THE EXECUTIVE OFFICER

2. REPORT OF THE EXECUTIVE OFFICER

GENERAL FINANCIAL REVIEW OF THE PUBLIC ENTITY

This report marks the fourth year of implementation under NSDS III. As with the

previous three years under NSDS III, the Fund continues to maintain a high level of

investment in national skills development priorities and priorities for achievement

of the Skills Development Act, 1998 (Act No. 97 of 1998). The consistency in the

NSF’s continued investment in skills development can be clearly noted from the

illustration below:

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-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

Total Investment in Skills Development vs

Total Revenue (excl. additional income from SETAs)

R'000

Skills Development Investment

Total Revenue (excl. additional income from SETAs)

NSDS III NSDS II NSDS I

Current Position (2014/15): Investment in skills development is on par with the NSF's total revenue (excl. additional income from SETAs) at R3.2 billion.

NSF's investment in skills development increased significantly since NSDS III.



2. REPORT OF THE EXECUTIVE OFFICER (CONTINUED)

SKILLS DEVELOPMENT FUNDING TRENDS OF THE NSF, INCLUDING NEW AND PROPOSED ACTIVITIES

NSF invests R3.2 billion in skills development during the 2014/15 financial year

The NSF’s improved capability to manage higher levels of grant disbursements has

laid a solid foundation for continued improvement in skills development funding

into the future.

For the year under review, the NSF has, in the main, invested in the training of

learners (R2.3 billion), followed by targeted investments in strengthening the PSET

system (R827.2 million) and investments in key research projects (R53.8 million).

The graph below illustrates the NSF’s investment in each of the respective areas:

The NSF’s investment in each of the respective areas is detailed below:

Skills development investment

R’000

Percentage of investment of

skills development

%

Training of learners 2 319 226 72%

Strengthening the PSET system 827 156 26%

Research 53 763 2%

TOTAL INVESTMENT IN SKILLS DEVELOPMENT 3 200 145 100%

As per the Annual Financial Statements

- Skills development grant disbursements

(As per the Statement of Financial Performance) 3 108 733

- Additions to TVET college infrastructure assets

(As per note 4 to the Annual Financial Statements) 91 412

TOTAL INVESTMENT IN SKILLS DEVELOPMENT 3 200 145

62 617 learners were funded by NSF during the 2014/15 financial year

The NSF’s invested R2.319 billion in the education and training of learners,

benefitted 62 617 learners during the 2014/15 financial year.

The NSF funded learners in the university sector, TVET college sector and in the

workplace for workplace based training.

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The NSF’s funding in each of these areas can be summarised as follows:

R827 million invested towards strengthening and building key PSET system priority areas

During the 2014/15 financial year the NSF invested R827 million in the following

key priorities in the PSET system:

1. R19.526 million towards strengthening the South African Artisan Development

system:

The NSF invested in strengthening the South African artisan development

system on a national, regional and local level, as the country embarks on a

drive to produce significantly increased numbers of qualified artisans.

The NSF’s investment in strengthening artisan development consisted of the

following:

i) Operationalising the National Artisan Development Body (NAMB) and

funding the work performed by NAMB.

The work performed by NAMB comprises the following:

- Artisan development career management;

- Artisan development information management;

- Artisan trade test management; and

- Artisan quality assurance management, including ICT requirements and

the establishment of regional artisan development structures.

ii) Operationalising the National Artisan Development support centre, housed

at Ekurhuleni East TVET college.

The support centre serves as the central data centre where all data related

to national artisan development is collected, analysed and used to inform all

national artisan development processes. The centre also houses the National

Artisan Development call centre that is responsible for providing information

on artisan development and also assisting in linking artisan learners with

prospective employers.

iii) The development, testing and implementation of a Recognition for Prior

Learning (RPL) model for artisans through INDLELA.

2. R58.513 million towards skills development dialogue, skills advocacy, skills

marketing and communications and social partners’ constituency members

capacity building:

The NSF supports the work of the National Skills Authority, which consists

mainly of the following:

1. Capacity building of constituency members on matters relating to skills

development;

2. National public dialogue and advocacy of skills development;

3. Skills development marketing and communication;

4. Provincial skills development forums; and

5. Capacity building of NSA members.


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3. R8.989 million towards establishing a credible mechanism for skills planning:

The NSF continues to invest in establishing an integrated credible skills planning

mechanism with the DHET, aimed at providing credible information regarding

both the supply and demand for skills, in order to inform planning in the PSET

system.

The NSF invested specifically in the following:

i. The development of an integrated database for supply-side data from all

post school entities, institutions and information systems, into an integrated

central information system to serve the DHET and the country. The system

is known as the Higher Education and Training Management Information

System (HETMIS) and is intended to contain data from:

- Public and private higher education institutions;

- Public and private TVET colleges;

- Adult education centres;

- NSF projects;

- SETA skills development programmes, learnerships, internships and

apprenticeships;

- Artisan data from NAMB; and

- Data from the National Learner Records Database.

ii. The development of a linked macro-education model for the labour market

aimed at analysing demand side data, commonly known as the Labour

Market Intelligence Project (LMIP)(Applied Development Research Solutions

(ADRS) Wits Educational Policy Unit (EPU) project).

4. R3.072 million towards establishing central application services:

The NSF invested in the establishment of central application services for entrants

into the PSET system. The central application system will facilitate and improve

the processing of applications into university undergraduate programmes,

TVET colleges and workplace learning programmes (internships, cadetships,

apprenticeships, etc.). A clearing house is being put in place to ensure late

applications are better managed than in the past and that the number of walk-

ins are decreased. The clearing house includes a call centre that will guide

applicants that have not yet been accepted anywhere to possible spaces that

are still available within institutions in the PSET system. The focus has been on

implementing the system for the university sector first, with the TVET college

sector and workplace learning programmes to follow.

5. R2.554 million towards strengthening open and distance learning within PSET:

The NSF invested in creating an enabling environment for the implementation of

open learning approaches and to identify workable models of open learning,

especially in the area of adult and youth, and the development of technical

and vocational skills using open learning.

The key deliverables consist of the following.

To:

- Develop an open learning conceptual framework, user specifications

of an open learning system and policy implications for government to

provide an outline of envisaged activities to be undertaken in order to

support, coordinate and to guide the development and provision of

open learning in the post-school system;

- Develop and initialise the implementation of a policy framework for

open learning in the PSET system;

- Implement pilots of an open learning system for post schooling;

- Collect case studies on the application of open learning in post

schooling that can be shared amongst countries;

- Coordinate and research the use of Open Education Resources (OER)

in post school education and training; and

- Manage the development of specifications for a full Open Learning

System.

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6. R46.408 million towards strengthening career advice and development within

PSET:

The NSF invested in strengthening career advice and development within the

PSET system through establishing career advisory services in conjunction with

SAQA and DHET, which delivered the following:

- The development of a National Career Advice Portal (NCAP), a database

of learning opportunities and occupational information;

- The development of a website as a central access point for all information

related to career development (including access through cell phones);

- The development of a telephone helpline to respond to requests and to assist

people in navigating career development paths;

- The generation of a mass communication campaign through social media,

radio, newspapers, exhibitions and print materials; and

- The establishment of walk-in services for local people.

7. R7.237 investment in curriculum development:

For the year under review, the NSF funded curriculum development related to:

1. Adult education and training; and

2. Integrating HIV/AIDS issues into university and TVET college curricula,

through the capacitation of university and TVET college academic staff in

partnership with HESA.

8. R7.136 towards supporting the Strategic Projects Unit (SPU) for Strategic

Infrastructure Projects (SIPs) and DHET Development Support:

For the year under review, the NSF provided R7.136 million towards special

projects management units, the SPU and DHET Development Support Unit, which

are aimed at addressing skills development that is linked to SIPs and related to

oversight of all the development projects funded by NSF and developed through

the DHET.

9. R335.167 million specifically towards university sector initiatives:

For the year under review, the NSF funded the following key university sector

initiatives:

1. Strengthening good governance and administration in universities to the

amount of R26.621 million; and

2. University infrastructure development to the amount of R308.546 million.

• University of Pretoria:

R208.996 million towards the University of Pretoria for expanding the University’s

medical and veterinary facilities. The expansions of the University of Pretoria’s

medical and veterinary facilities as key public delivery infrastructure will increase the

number of medical doctors and veterinaries trained annually. Both skills are scarce

and critical skills for South Africa to address the demands posed by the National

Health Insurance scheme to make health universally accessible to every citizen of the

country and to address an urgent need for medical and general animal health.

• University of Johannesburg:

R78.84 million towards the University of Johannesburg for establishing work-

integrated learning facilities for engineering students, which include a training

workshop, design centre and industrialisation centre. These facilities, as key public

delivery infrastructure, are critical to improve the production of quality engineers in

the entire university sector. Engineers are a scarce and critical resource for South

Africa, especially taking cognisance of South Africa’s ratio of engineers to citizens

in comparison with other BRICS countries. This shortage of engineers can be partly

attributed to the lack of work integrated learning for a large number of engineering

graduates as a result of the lack of workplace opportunities. The work-integrated

learning facilities at the University of Johannesburg aim to overcome this challenge.

These facilities, in the form of a production environment, will be accessible to all


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engineering students in need of work integrated learning, irrespective of the university

of origin.

• Cape Peninsula University of Technology

R8.794 million towards the Cape Peninsula University of Technology for establishing

renewable energy training facilities. These facilities, as key public delivery

infrastructure, are critical in the production of a set of new skills required for the green

economy. This initiative, being the first of its kind in the country, seeks to respond to

the country’s adopted strategy to promote renewable energy production in order

to supplement the current fossil fuel energy production and gradually reduce the

country’s carbon footprint. The department has seen it fit to establish this dedicated

education and training capacity for the country to produce high and middle level

skills in the area of renewable energy, which is currently an area of growth within the

South African economy.

• University of Cape Town

R6.366 million towards establishing a dedicated state-of-the-art hair testing and

research laboratory by the University of Cape Town’s Division of Dermatology. It will

be a first on the African continent to train an expected 10 Master’s degree students

in hair science a year, and also offer medical and forensic testing services for drugs,

diseases, toxins and nutrients, as well as hair cosmetic testing.

• Walter Sisulu University

R5.55 million towards installing modern teaching and learning technology at Mthatha

campus and installing security palisade fencing around student residence.

10. R338.554 million specifically towards TVET college sector initiatives:

For the year under review, the NSF funded the following key TVET college sector

initiatives:

1. R72.481 million towards strengthening good governance and administration

in TVET colleges. In this regard, the NSF funds, in the main, the SAICA CFOs

and Human Resource generalists support in the TVET colleges.

2. R1.305 million towards improving the quality of curriculum offered in TVET

colleges. This consisted of screening TVET textbooks during the year under

review and funding the Ministerial task team on the establishment of South

African Institute for Vocational and Continuing Education and Training.

3. R220.221 million towards TVET college infrastructure development.

• 12 new TVET College Campuses and refurbishment of 4 existing TVET College Campuses

R116.948 million towards the development of the 12 new TVET college

campuses and the refurbishment of 4 existing campuses. The TVET college

campuses are developed in geographical areas close to communities in

high demand for post-school education facilities, based on the density of

the population within each identified area and the unavailability of sufficient

post-school education and training facilities within the region. It is vital to

provide the South African communities from these geographical locations

with the opportunity towards acquiring a skill, relevant to the workplace, by

establishing sufficient campuses close to the communities.

The physical construction of the first 3 new TVET college campuses has begun,

namely Bhambanana, Nkandla A and Thabazimbi.

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R53.763 million invested in research

During the 2014/15 financial year the NSF has invested in the following key research initiatives:

Research R’000

Skills legislation review and research work through the National Skills Authority (NSA).

11

Research on the implementation of transformation, social cohesion and the elimination of discrimination in the PSET sector (Soudien Report, University of KZN - CCRRI project).

5 920

Initiatives aimed at expanding research in the area of Humanities and Social Sciences, whilst incorporating the African perspective thereon.

13 382

Research and public engagement on the PSET system (Research and public engagement on the White Paper for PSET).

8 367

Research aimed at supporting the Human Resource Development Strategy of South Africa (HRDSA) through the Human Resource Development Council (HRDCSA).

During the 2014/15 financial year, the priorities remained related to the following:• To strengthen and support the expansion of TVET college access;• The production of intermediate skills (in particular artisans) and professionals;• The production of academics and stronger industry- university partnerships in research and development;• Strengthening foundational learning; and• Addressing worker education.

7 908

Research aimed at improving mathematics and science within the PSET system.

7

Research R’000

Labour Market Inteligence Research

Labour market intelligence research towards developing a credible mechanism for skills planning (Labour Market Intelligence Project in conjunction with the Human Science Research Council). The research is aimed at understanding how to build a single coordinated system, how to ensure quality education and training programmes at all levels that are relevant to the demands of the labour market and of social development, and how to inform the design of appropriate new policy interventions, but also to monitor performance and progress towards goals.

The broad objectives of the research programme are:

- Information and knowledge advancement: To advance information and knowledge of the PSET system in relation to inclusive growth, through good quality research and critical scholarship.

- Labour market intelligence: To interpret and analyse information and knowledge in the light of policy, sectoral needs and other education, training and skills issues, and to build models to create labour market intelligence, to provide evidence to inform decision making, strategic planning and interventions.

- Research capacity development: To facilitate coherent and complementarity in the research field to ensure more effective impact of research on policy, and to increase the national pool of researchers, especially African and women researchers, working in the area of higher education, training, skills development and labour market analysis.

- Institutional capacity development: To enhance the capacity of the DHET and SETAs to gather labour market information, design a national data acrhitecture and strategic framework, and to interpret labour market intelligence in the light of policy goals and programmes.

- Research innovation: Knowledge and intelligence generated from this research programme will be shared and debated within the research community and with policy makers.

6 714


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Research R’000

Research conducted through Ministerial task teams on the following:- Recognition of prior learning;- African languages in universities;- SETAs;- University funding review; and- Community Education and Training Centres (CETCs).

11 454

TOTAL 53 763

Capacity constraints and challenges facing the Fund

The NSF is recognised as an important role player within the PSET system and is characterised as a catalytic fund in the NSDS III. With the NSF continuing to increase its investment in skills development priorities, additional responsibilities are continuously being allocated to the Fund to respond to the social and economic demand for skills development.

The NSF takes up the responsibilities it is being called upon and aims to increase the Fund’s effectiveness and efficiency on a continuous basis. This will require the Fund to become more innovative, flexible and responsive, institutionalising a continuous drive for improvement in all areas concerned. As a result of increased funding responsibilities the NSF will be addressing capacity constraints across the entire skills development funding life cycle.

The key areas that will be addressed are as follows:1. Strategic planning capacity supported by strong research and analysis

capabilities. Strategic partnerships will also be forged to ensure integrated skills planning;

2. Dedicated brokering and facilitation capacity (also referred to as dealmakers) that will be dedicated towards initiating skills development initiatives aligned to the NSF’s strategic objectives and in accordance with the required compliance frameworks;

3. Dedicated and competent evaluation capacity that will be responsible for ongoing evaluation of outcomes and impact of NSF funded initiatives;

4. Strengthened monitoring capacity that will be responsible for monitoring outputs

throughout the execution of skills development initiatives. ICT technology as an enabler will also support in strengthening the monitoring capabilities of the NSF;

5. Dedicated high level finance capacity that will act as business partners and support to the core skills development functions aimed at strengthening financial management throughout the skills development life cycle at all levels; and

6. Dedicated and competent innovation and continued business improvement capacity that will be responsible for innovation and continuous improvement both externally and internally to the NSF.

The NSF has finalised the design of its proposed organisational structure and is following due consultative processes for finalisation thereof.

Requests for roll over of funds

The NSF applied for the retention of the net surplus for the 2014/15 financial year, which are inclusive of SETA uncommitted surpluses of R2.6 billion (R11.222 billion), in terms of section 53(3) of the PFMA from National Treasury during the first quarter of the 2015/16 financial year. This approval has not yet been granted by National Treasury.

Supply chain management

• Unsolicited bid proposals: No unsolicited bid proposals were concluded during the year.

• SCM processes and systems in place: Due to the NSF forming part of the DHET as a programme under the skills

development branch, the NSF has been fully reliant on DHET SCM policies, processes and systems. A Memorandum of Agreement (MoA) is in place with DHET to assist NSF with SCM functions including utilisation of bid committees.

• Challenges experienced and resolved: With the listing of the NSF as a Schedule 3A public entity, it is envisaged that

the NSF will establish its own Supply Chain Management (SCM) unit under the office of the NSF’s Chief Financial Officer.

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Audit report matters in the previous year and how they will be addressed

Inaccurate and untimely financial and performance reporting resulting in non- compliance with applicable laws and regulations has been identified as an audit report matter to be addressed by the NSF.

The root causes for inaccurate and untimely financial reporting can be attributed to insufficient financial capacity within the Fund and the lack of an accrual accounting system throughout the year. Both of these root causes were addressed during the financial year through the appointment of additional financial capacity within the Fund and the implementation of an accrual accounting system during the year. The additional high level financial capacity was appointed during October 2014, whose initial efforts was aimed at implementing the new accrual accounting system for the NSF, implementing accrual accounting disciplines within the Fund and capturing of all backlog information on the system. The system came into full operation by the end of March 2015. The accounting environment has subsequently been stabilised, with the NSF, for the first time, having institutionalised capacity to account and report on the accrual basis as required in terms of General Recognised Accounting Practices (GRAP).

The root cause resulting in inaccurate and untimely performance information reporting can be attributed to insufficient monitoring and evaluation capacity within the Fund and the lack of an automated performance information system. The NSF has subsequently completed the design of its proposed monitoring and evaluation organisational structures, which will be supported by enabling ICT monitoring and evaluation technology.

Outlook for the future to address financial challenges

The NSF has committed and earmarked R8.3 billion towards skills development projects of national priority as at the end of the 2014/15 financial year.

These commitments will be funded through the NSF’s current surpluses.

The NSF’s levy increased by 9.3% from the 2013/14 to the 2014/15 financial year. It is expected that the future skills development levies will increase at a minimum of inflation, currently at 6% per annum until the end of the NSDS III period, namely

31 March 2016. Thus, a total of R2.937 billion in skills development levy income is expected for the remainder of the NSDS III period.

Events after the reporting date

There are no events after reporting date.

Economic Viability

As per the Regulation approved by the Executive Authority, the NSF may utilise 10% of its income towards administration of the Fund. This allocation towards administrative costs is sufficient for the NSF to fund its operations.

Financial management

The NSF’s financial management is sound and compliant to PFMA and National Treasury regulations. The financial statements have been prepared in accordance with the effective Standards of Generally Recognised Accounting Practices (GRAP) including any interpretations, guidelines and directives issued by the Accounting Standards Board.

Other PFMA requirements

The NSF reports through the structures and processes of the DHET in so far as compliance with the PFMA is concerned, namely:

• Basis of Accounting – The NSF prepared its financial statements for 2014/15 financial year on an accrual basis as required by the PFMA for Schedule 3A public entities.

• Quarterly reporting – The NSF’s quarterly reporting for the 2014/15 financial year followed the reporting processes as required by the DHET. The NSF reports quarterly on its performance against its strategic plan and annual performance plan, as well as on its financial and compliance information in accordance to the National Treasury prescribed format and timeframes.


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• Actual revenue and expenditure projections – The relevant information that forms part of the MTEF and ENE processes are submitted to National Treasury via the processes of the Department of Higher Education and Training in the prescribed format and timeframes.

• Annual financial statements – These statements are compiled by the National Skills Fund and have been submitted timeously for audit purposes.

• Annual report – Information with regard to the NSF are covered within the Annual Report of the National Skills Fund.

• Completeness of revenue - Skills Development Levy (SDL) transfers are recognised when it is probable that future economic benefit can be measured reliably. This occurs when the Department of Higher Education and Training (DHET) either makes an allocation or payment, whichever comes first, to the SETAs and NSF, as required by Section 6(5) of the Skills Development Levies Act, 1999 (Act No.9 of 1999). The SDL transfer is measured at the fair value of the consideration received.

Asset Management

Asset management is performed by the NSF as all functions with regard to the NSF’s assets have been taken over from the Department of Higher Education and Training during the 2014/15 financial year.

TVET college infrastructure development assets are however managed by the DHET in terms of the agency agreement between the DHET and the NSF.

Irregular expenditure

The NSF incurred irregular expenditure during the 2014/15 financial year. Please refer to note 33 in the Annual Financial Statements.

SCOPA resolutions

There were no new SCOPA resolutions affecting the Fund during the reporting period.

Exemptions and deviations received from National Treasury

There were no exceptions and deviation received from National Treasury.

Approval

The Annual Financial Statements have been approved by the Accounting Authority.

Mr MV MacikamaExecutive OfficerNational Skills Fund

31 July 2015

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3. REPORT OF THE AUDITOR-GENERAL TO PARLIAMENT ON THE NATIONAL SKILLS FUND

Report on the financial statements

Introduction

1. I have audited the financial statements of the National Skills Fund (NSF) set out

on pages 91 to 187, which comprise the statement of financial position as at

31 March 2015, the statement of financial performance, statement of

changes in net assets, cash flow statement and the statement of comparison

of budget information with actual information for the year ended, as well as

the notes, comprising a summary of significant accounting policies and other

explanatory information.

Accounting Authority’s responsibility for the financial statements

2. The Accounting Authority is responsible for the preparation and fair

presentation of these financial statements in accordance with South African

Standards of Generally Recognised Accounting Practice (SA Standards of

GRAP) and the requirements of the Public Finance Management Act of South

Africa, 1999 (Act No. 1 of 1999) (PFMA) and the Skills Development Act

of South Africa, 1998 (Act No. 97 of 1998) (SDA), and for such internal

control as the Accounting Authority determines is necessary to enable the

preparation of financial statements that are free from material misstatement,

whether due to fraud or error.

Auditor-General’s responsibility

3. My responsibility is to express an opinion on these financial statements

based on my audit. I conducted my audit in accordance with International

Standards on Auditing. Those standards require that I comply with ethical

requirements, and plan and perform the audit to obtain reasonable assurance

about whether the financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the

amounts and disclosures in the financial statements. The procedures selected

depend on the auditor’s judgement, including the assessment of the risks of

material misstatement of the financial statements, whether due to fraud or

error. In making those risk assessments, the auditor considers internal control

relevant to the entity’s preparation and fair presentation of the financial

statements in order to design audit procedures that are appropriate in the

circumstances, but not for the purpose of expressing an opinion on the

effectiveness of the entity’s internal control. An audit also includes evaluating

the appropriateness of accounting policies used and the reasonableness of

accounting estimates made by management, as well as evaluating the overall

presentation of the financial statements.

5. I believe that the audit evidence I have obtained is sufficient and appropriate

to provide a basis for my audit opinion.

Opinion

6. In my opinion, the financial statements present fairly, in all material respects,

the financial position of the NSF as at 31 March 2015 and its financial

performance and cash flows for the year then ended, in accordance with SA

Standards of GRAP and the requirements of the PFMA and the SDA.

Emphasis of matter

7. I draw attention to the matter below. My opinion is not modified in respect of

this matter.

Restatement of corresponding figures

8. As disclosed in note 23 to the financial statements, the corresponding figures

for 31 March 2014 have been restated as a result of an error discovered during

the current year in the financial statements of the NSF at, and for the year ended,

31 March 2014.

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Report on other legal and regulatory requirements

9. In accordance with the Public Audit Act of South Africa, 2004 (Act No.

25 of 2004) (PAA) and the general notice issued in terms thereof, I have

a responsibility to report findings on the reported performance information

against predetermined objectives for selected programmes presented in the

annual performance report, non-compliance with legislation and internal

control. The objective of my tests was to identify reportable findings as

described under each subheading but not to gather evidence to express

assurance on these matters. Accordingly, I do not express an opinion or

conclusion on these matters.

Predetermined objectives

10. I performed procedures to obtain evidence about the usefulness and

reliability of the reported performance information for the following selected

programmes presented in the annual performance report of the public entity

for the year ended 31 March 2015:

• Programme 1: Effective and efficient programme/ project preparation on

pages 34 to 36

• Programme 2: Effective and efficient project management on pages 37 to 39

• Programme 3: Excellence in resource management on page 40.

11. I evaluated the reported performance information against the overall criteria

of usefulness and reliability.

12. I evaluated the usefulness of the reported performance information to determine

whether it was presented in accordance with the National Treasury’s annual

reporting principles and whether the reported performance was consistent

with the planned programmes. I further performed tests to determine whether

indicators and targets were well defined, verifiable, specific, measurable,

time bound and relevant, as required by the National Treasury’s Framework

for managing programme performance information (FMPPI).

13. I assessed the reliability of the reported performance information to determine

whether it was valid, accurate and complete.

14. The material findings in respect of the selected programmes are as follows:

Programme 1: Effective and efficient programme/ project preparation

Usefulness of reported performance information

Measurability of targets

15. Performance targets should be specific in clearly identifying the nature and

required level of performance as required by the FMPPI. A total of 33% of

the targets were not specific.

16. Performance targets should be measurable as required by the FMPPI. We

could not measure the required performance for 33% of the targets.

This was because the NSF does not have appropriately skilled individuals to

manage performance information.

Reliability of reported performance information

17. The FMPPI requires auditees to have appropriate systems to collect, collate,

verify and store performance information to ensure valid, accurate and

complete reporting of actual achievements against planned objectives,

indicators and targets. A total of 33% of targets were not reliable when

compared to the source information or evidence provided. This is due to

the fact that proper indicator definitions were not used to predetermine the

evidence and method of calculation for actual achievements.

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Programme 2: Effective and efficient project management

Reliability of reported performance information

18. The FMPPI requires auditees to have appropriate systems to collect, collate,

verify and store performance information to ensure valid, accurate and

complete reporting of actual achievements against planned objectives,

indicators and targets. The reported performance information was not

valid, accurate and complete when compared to the source information or

evidence provided. This was due to a lack of standard operating procedures

for the recording and monitoring of performance; inadequate review of

accuracy and completeness of source documentation in support of actual

achievements; infrequent review of the validity of reported achievements

against source documentation and the lack of a record management system

for performance information to allow for accurate and complete collation,

recording and reporting on performance information.

19. I did not raise any material findings on the usefulness and reliability of the

reported performance information for the following programme:

• Programme 3: Excellence in resource management.

Additional matters

20. I draw attention to the following matters:

Achievement of planned targets

21. Refer to the annual performance report on pages 27 to 55; for information on

the achievement of planned targets for the year. This information should be

considered in the context of the material findings on usefulness and reliability

of the reported performance information for the selected programmes

reported in paragraphs 16 to 18 of this report.

Adjustment of material misstatements

22. I identified material misstatements in the annual performance report submitted

for auditing on the reported performance information of programme 3:

Excellence in resource management. As management subsequently corrected

the misstatements I did not raise any material findings on the usefulness of the

reported performance information

Compliance with legislation

23. I performed procedures to obtain evidence that the public entity had complied

with applicable legislation regarding financial matters, financial management

and other related matters. My findings on material non-compliance with

specific matters in key legislation, as set out in the general notice issued in

terms of the PAA, are as follows:

Annual financial statements

24. The Accounting Authority submitted financial statements for auditing that

were not prepared in all material aspects in accordance with prescribed

accounting framework as required by section 55(1)(b) of the PFMA.

Material misstatements in administrative expenses, grant disbursements,

deferred expenditure, property, plant and equipment, payables from

exchange transactions, provisions, irregular expenditure disclosure note,

and commitments disclosure note identified by the auditors in the submitted

financial statements were subsequently corrected, resulting in the financial

statements receiving an unqualified audit opinion.

Strategic planning and performance management

25. Effective, efficient and transparent systems of risk management and internal

controls with respect to performance information and management were not

in place as required by section 51(1)(a)(i) of the PFMA. The entity did not

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have appropriate systems to collect, collate, verify and store performance

information to ensure valid, accurate and complete reporting of actual

achievements against planned objectives, indicators and targets as required

by FMPPI.

Expenditure management

26. The Accounting Authority did not take effective steps to prevent irregular

expenditure, as required by section 51(1)(b)(ii) of the PFMA.

Internal control

27. I considered internal control relevant to my audit of the financial statements,

annual performance report and compliance with legislation. The matters

reported below are limited to the significant internal control deficiencies that

resulted in the findings on the annual performance report and compliance

with legislation included in this report.

Leadership

28. The NSF does not have a unit that is responsible for managing performance

information and still relies on the Chief Financial Officer to perform this

function. This resulted in material misstatements identified in the annual

performance report.

29. The NSF’s standard operating procedures for performance information have

not been updated to include the current procedures and processes followed

for recording of data, validation of data, data approval, data storage and

security and protection of confidential data.

30. The NSF had developed an action plan to address previously reported

external audit findings. However, these actions addressed the long-term

solutions. Management implemented short-term measures that were aimed at

year-end reporting and not in-year reporting. These short-term measures did

not achieve the desired outcomes which resulted in repeat findings.

Financial and performance management

31. The NSF does not have a proper record and information management system

in place for financial and performance reporting.

32. Daily and monthly processing and reconciling of transactions were performed

on a cash basis and not the accrual basis of accounting.

Pretoria

31 July 2015

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Nkomazi District Municipality in Mpumalanga has received more than R62 million from the Department of Higher Education and Training’s National Skills Fund (NSF) to help develop the youth’s skills in construction, agriculture, hospitality and tourism.

The skills development project, known as Masicathule, is expected to help 1 160 learners, by the end of 2016. Close to 100% of the black youths in the district have no formal education which makes it difficult to have a sustainable labour force.

Already learners are being trained in plant production farming at the project’s centre which will empower them and contribute towards the district’s socio-economic growth.

Another seven learners who were trained in plant production farming are now employed by local farmers.

Some of the poultry farming learners have formed cooperatives which are currently being registered. Other learners have joined Transnet’s internship programme.

According to Liyanda Handula, one of the creatives behind the project, the success of the project is in line with the initial vision.

“We wanted to increase levels of employment, reduce unemployment and help our people to put food on the tables,” explained Handula.

He explained that the goal was to promote local economic development in the district.

“The pilot is a success. I can see this project going further with more opportunities being availed to our people in Mpumalanga,” said Handula.

Suc

cess

Sto

ry

R62 MILLION GOES INTO SKILLING MPUMALANGA YOUTH

Success Story



National Skills FundFinancial Statements

for the year ended 31 March 2015

The Annual Financial Statements for the year ended 31 March 2015 have been approved by the Accounting Authority in terms of section 55(1)(c) of the Public Finance Management Act (PFMA), No 1 of 1999.

Mr. Gwebinkundla Fellix QondeDirector General of Higher Education and TrainingAccounting Authority of the National Skills Fund

31 July 2015

TABLE OF CONTENTS

The reports and statements set out below comprise the Annual Financial Statements:

1. Statement of financial position 92 - 93

2. Statement of financial performance 94 - 95

3. Statement of changes in net assets 96

4. Statement of cash flow 97

5. Statement of comparison of budget and actual amounts 98 - 99

6. Notes to the Annual Financial Statements 100 - 187

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n Statement of Financial Position as at 31 March 20152014/15 2013/14

Restated

Notes R'000 R'000

ASSETS

Non-current Assets 261 357 344 743

Property, plant and equipment 2. 10 023 765

Intangible assets 3. 1 697 225

TVET college infrastructure assets 4. 249 637 158 225

Trade and other receivables from non-exchange transactions 7. - 185 528

Current assets 11 963 780 9 025 597

Investments 5. 7 931 051 5 797 841

Trade and other receivables from exchange transactions 6. 15 -

Trade and other receivables from non-exchange transactions 7. 520 091 434 169

Deferred expenditure on skills development grant disbursements 8. 1 242 082 1 631 675

Cash and cash equivalents 9. 2 270 541 1 161 912

TOTAL ASSETS 12 225 137 9 370 340


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Statement of Financial Position as at 31 March 2015 (continued)2014/15 2013/14

Restated

Notes R'000 R'000

LIABILITIES

Current liabilities 1 002 882 775 426

Trade and other payables from non-exchange transactions 10. 946 820 745 685

Trade and other payables from exchange transactions 11. 50 826 25 422

Provisions 12. 5 236 4 319

TOTAL LIABILITIES 1 002 882 775 426

TOTAL NET ASSETS 11 222 255 8 594 914

FUNDS CONTRIBUTED BY:

Capital and reserves 11 222 255 8 594 914

TVET college infrastructure development reserve 2 612 729 2 577 855

SETA uncommitted surplus reserve 2 646 428 -

Accumulated surplus 5 963 098 6 017 059

TOTAL CAPITAL AND RESERVES* 11 222 255 8 594 914

* As at year-end the NSF has committed and earmarked its entire reserves and accumulated surplus, excluding the surpluses from SETAs, towards skills development programmes and projects. The SETA uncommitted surpluses were transferred to the NSF at year-end (31 March 2015) and hence the surplus funds will be committed during the 2015/16 financial year towards skills development programmes and projects.

The NSF’s mandate is to fund skills development as outlined in the Skills Development Act, 1998 (Act No. 97 of 1998). Hence, the nature of the Fund is developmental and not profit-driven. The Fund’s purpose is not to accumulate large reserves for investment, but utilise its funds towards skills development and thereby contribute towards unlocking the human potential of South Africa’s citizens. Since the dawn of the NSDS III, the National Skills Fund’s performance in skills development grants disbursements has increased consistently and significantly. The National Skills Fund started to utilise both its annual income and accumulated reserves to effective use towards funding skills development. The NSF’s improved performance can be clearly noted through its high level of commitments towards skills development.

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n Statement of Financial Performance for the year ended 31 March 20152014/15 2013/14

Restated

Notes R'000 R'000

REVENUERevenue from Non-Exchange Transactions 5 397 033 3 592 955Skills development levies 13. 2 750 601 2 514 907

Income from SETAs 14. 2 646 428 1 077 854

Bad debts recovered 15. 4 194

Revenue from Exchange Transactions 481 699 391 064Finance income 16. 422 992 356 893

Finance income from advance payments to skills development programmes and projects 17. 58 707 34 171

TOTAL REVENUE 5 878 732 3 984 019

EXPENSES

Skills Development Expenses 3 125 510 2 978 413

Skills development grant disbursements 18. 3 108 733 2 978 413

Provision for impairment 7. 16 777 -

Administrative Expenses 132 614 95 380

Employee costs 19. 29 229 24 496

Operating expenses 20. 49 757 19 760

Management fees and bank charges 21. 2 343 2 092

Levy collection costs to SARS 48 561 48 745

Depreciation and amortisation 2. & 3. 2 724 287

TOTAL EXPENSES 3 258 124 3 073 793


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** The National Skills Fund’s mandate is to fund skills development as outlined in the Skills Development Act, 1998 (Act No. 97 of 1998). Hence, the nature of the Fund is developmental and not profit-driven. The Fund’s purpose is not to accumulate large reserves for investment, but to utilise its funds towards skills development and thereby contribute towards unlocking the human potential of South Africa’s citizens. Since the dawn of the NSDS III, the National Skills Fund’s performance in skills development grants disbursements has increased consistently and significantly. The National Skills Fund started to utilise both its annual income and accumulated reserves towards funding skills development.

Statement of Financial Performance for the year ended 31 March 2015 (continued)

2014/15 2013/14

RestatedNotes R’000 R’000

OTHER INCOME

Loss on disposal of assets (163) -

Fair value adjustments - financial instruments at fair value 5. 6 896 -

TOTAL OTHER INCOME 6 733 -

NET SURPLUS FOR THE YEAR ** 2 627 341 910 226


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Statement of Changes in Net Assets for the year ended 31 March 2015TVET college infrastructure

development reserve

R’000

SETAuncommitted

surplus reserve

R’000

Accumulatedsurplus

R’000

Total

R’000

Balance at 1 April 2013 - - 7 684 689 7 684 689

Net surplus per statement of financial performance 1 077 855 - (167 630) 910 225

As originally stated 946 587 - (169 484) 777 103

Prior period correction 131 268 - 1 854 133 122

Accumulated surplus earmarked for1 500 000 - (1 500 000) -TVET college infrastructure development

Balance at 31 March 2014 2 577 855 - 6 017 059 8 594 914

Balance at 1 April 2014 2 577 855 - 6 017 059 8 594 914

Net surplus per statement of financial performance 34 874 2 646 428 (53 961) 2 627 341

Total revenue and other income 60 405 2 646 428 3 178 632 5 885 465

Total expenses (25 531) - (3 232 593) (3 258 124)

Accumulated surplus earmarked forTVET college infrastructure development - - - -

Balance at 31 March 2015 ** 2 612 729 2 646 428 5 963 098 11 222 255

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** As at year-end the NSF has committed and earmarked its entire reserves and accumulated surplus, excluding the surpluses from SETAs, towards skills development programmes and projects. The SETA uncommitted surpluses were transferred to the NSF at year-end (31 March 2015) and hence the surplus funds will be committed during the 2015/16 financial year towards skills development programmes and projects.

The NSF’s mandate is to fund skills development as outlined in the Skills Development Act. Hence, the nature of the Fund is developmental and not profit-driven. The Fund’s purpose is not to accumulate large reserves for investment, but utilise its funds towards skills development and thereby contribute towards unlocking the human potential of South Africa’s citizens. Since the dawn of the NSDS III, the National Skills Fund’s performance in skills development grants disbursements has increased consistently and significantly. The National Skills Fund started to utilise both its annual income and accumulated reserves to effective use towards funding skills development. The NSF’s improved performance can be clearly noted through its high level of commitments towards skills development.



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nStatement of Cash Flow for the year ended 31 March 20152014/15 2013/14

Restated

Notes R'000 R'000

Cash flows from operating activitiesCash receipts from stakeholders 5 652 537 2 915 562

Levies, interest and penalties received 2 768 542 2 416 365

Other cash receipts from stakeholders 2 883 995 499 197

Cash paid to stakeholders, suppliers and employees (2 756 611) (3 520 376)

Skills development grant payments (2 651 824) (3 436 175)

Employee costs (29 001) (24 025)

Payments to suppliers and other (75 786) (60 176)

Cash generated from operations 22. 2 895 926 (604 814)

Finance income 444 047 372 470

Net cash from operating activities 3 339 973 (232 344)

Cash flows from investing activitiesAdditions to property, plant and equipment (11 676) (1 175)

Additions to intangible assets (1 943) -

Additions to TVET college infrastructure assets (91 412) (158 225)

(Additions to) / withdrawals from investments (2 126 313) 1 548 808

Net cash flows from investing activities (2 231 344) 1 389 408

Increase in cash and cash equivalents 1 108 629 1 157 064

Cash and cash equivalents at beginning of the year 1 161 912 4 848

Cash and cash equivalents at end of the year 9. 2 270 541 1 161 912


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n Statement of Comparison of Budget and Actual AmountsApproved andfinal budget *

Actual amounts

on accrual basis

Adjustments to

cash basis

Actual amounts

on cash basis

(Under) / Over

budget

(Under) / Over

budget

REVENUE R'000 R'000 R'000 R'000 R'000 %

REVENUE FROM NON-EXCHANGE TRANSACTIONS 3 247 890 5 397 033 276 563 5 673 596 2 425 706 74.7%

Skills development levies 2 687 353 2 750 601 17 941 2 768 542 81 189 3.0%

Income from SETAs 560 537 2 646 428 258 622 2 905 050 2 344 513 418.3%

Bad debts recovered - 4 - 4 4 100.0%

REVENUE FROM EXCHANGE TRANSACTIONS 353 226 481 699 - 481 699 128 473 36.4%

Finance income 303 226 422 992 - 422 992 119 766 39.5%

Other income 50 000 58 707 - 58 707 8 707 17.4%

TOTAL REVENUE 3 601 116 5 878 732 276 563 6 155 295 2 554 179 70.9%

* The budget was prepared on the cash basis of accounting and their are no changes between the approved and final budget.


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Statement of Comparison of Budget and Actual Amounts (continued)Approved andfinal budget

Actual amounts

on accrual basis

Adjustments to

cash basis

Actual amounts

on cash basis

(Under) / Over

budget

(Under) / Over

budget

EXPENSES R'000 R'000 R'000 R'000 R'000 %

SKILLS DEVELOPMENT GRANT DISBURSEMENTS

NSDS III 5 637 688 3 108 733 (368 764) 2 739 969 (2 897 719) (51%) HRDSSA 66 490 7 908 1 578 9 486 (57 004) (86%)

NSA ministerial 66 954 58 524 1 022 59 546 (7 408) (11%)

Government priorities 1 852 526 1 204 959 (160 165) 1 044 794 (807 732) (44%)

Director-General priorities 1 501 999 1 411 903 (203 891) 1 208 012 (293 987) (20%)

Skills infrastructure 2 149 719 425 439 (7 308) 418 131 (1 731 588) (81%)

TOTAL SKILLS DEVELOPMENT GRANT DISBURSEMENTS 5 637 688 3 108 733 (368 764) 2 739 969 (2 897 719) (51%)

ADMINISTRATIVE EXPENSES

Employee costs 54 111 29 229 (228) 29 001 (25 110) (46.4%)

Operating expenses 75 020 49 757 49 757 (25 263) (33.7%)

Management fees and bank charges 2 370 2 343 2 343 (27) (1.1%)

Collection costs to SARS 107 023 48 561 48 561 (58 462) (54.6%)

Depreciation 2 724 2 724 0.0%

Capital expenditure 30 000 13 619 13 619 (16 381) (54.6%)

TOTAL ADMINISTRATIVE EXPENSES 268 524 132 614 16 115 143 281 (125 243) (46.6%)

NET SURPLUS FOR THE YEAR 3 332 592 5 746 118 260 448 6 012 014 2 679 422 80.4%

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n Notes to the Annual Financial Statements

1. ACCOUNTING POLICIES

1.1 Basis of preparation

The financial statements have been prepared in accordance with the effective Standards of Generally Recognised Accounting Practices (GRAP) including any interpretations, guidelines and directives issued by the Accounting Standards Board. The financial statements are presented in South African rands which is the functional reporting currency for the National Skills Funds and all values are rounded off to the nearest thousands (R’000). The financial statements have been prepared on the accrual basis with the exception of assets which have been revalued. The financial statements have been prepared on the going concern basis and the accounting policies have been consistently applied to all the years presented.

The accounting framework of the entity, based on the preceding paragraph, is therefore as follows:

- GRAP 1: Presentation of financial statements; - GRAP 2: Cash flow statements; - GRAP 3: Accounting policies, changes in accounting estimates

and errors;- GRAP 4: The effects in changes in foreign exchange rates;- GRAP 5: Borrowing costs;- GRAP 9: Revenue from exchange transactions;- GRAP 12: Inventories;- GRAP 13: Leases;- GRAP 14: Events after reporting date;- GRAP 17: Property, plant and equipment;- GRAP 19: Provisions, contingent liabilities and contingent assets;- GRAP 21: Impairment of non-cash-generating assets;- GRAP 23: Revenue from non-exchange transactions;

- GRAP 24: Presentation of budget information in the financial statements;

- GRAP 25: Employee benefits;- GRAP 26: Impairment of cash-generating assets;- GRAP 100: Non-current assets held for sale and discontinued

operations;- GRAP 103: Heritage assets; and- GRAP 104: Financial instruments.

Directives issued and effective:

- Directive 1: Repeal of existing transitional provisions in, and consequential amendments to, standards of GRAP;

- Directive 2: Transitional provisions for the adoption of standards of GRAP by public entities, trading entities, municipal entities and constitutional institutions;

- Directive 5: Determining the GRAP reporting framework; and- Directive 7: The application of deemed cost on the adoption of

standards of GRAP.

Interpretations of the Standards of GRAP approved:

- IGRAP 1: Applying the probability test on the initial recognition of exchange revenue;

- IGRAP 2: Changes in existing decommissioning, restoration and similar liabilities;

- IGRAP 3: Determining whether an arrangement contains a lease.- IGRAP 4: Rights to interest arising from decommissioning,

restoration and environmental rehabilitation funds;- IGRAP 5: Applying the restatement approach under the


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standard of GRAP on financial reporting in hyper inflationary economies;

- IGRAP 6: Loyalty programmes;- IGRAP 8: Agreements for the construction of assets from

exchange transactions;- IGRAP 9: Distributions of non-cash assets to owners;- IGRAP 10: Assets received from customers;- IGRAP 13: Operating leases - Incentives; and- IGRAP 14: Evaluating the substance of transactions involving the

legal form of a lease.

Approved guidelines of standard of GRAP:- Guide 1: Guideline on accounting for public private partnerships

Effective accrual based IPSASs:- IPSAS 20: Related parties disclosure

Effective IFRSs and IFRICs that are applied:- IAS 19 (AC 116): Employee benefits

1.2 Changes in accounting policies, estimates and errors

The accounting policies applied are consistent with those used to present the previous year’s financial statements, unless explicitly stated otherwise.

The entity changes an accounting policy only if the change: - Is required by a standard of GRAP; or - Results in the Annual Financial Statements providing reliable and more

relevant information about the effects of transactions, other events or conditions, on the performance or cash flow.

Changes in accounting policies that are affected by management have been applied retrospectively in accordance with GRAP 3 requirements, except to the extent that it is impracticable to determine the period-specific effects or the cumulative effect of the change in policy. In such cases the

entity restated the opening balances of assets, liabilities and net assets for the earliest period for which retrospective restatement is practicable.

Changes in accounting estimates are applied prospectively in accordance with GRAP 3 requirements. Details of changes in estimates are disclosed in the notes to the Annual Financial Statements where applicable.

1.3 Critical judgements, estimations and assumptions

Correction of errors is applied retrospectively in the period in which the error has occurred in accordance with GRAP 3 requirements, except to the extent that it is impracticable to determine the period-specific effects or the cumulative effect of the error. In such cases the entity shall restate the opening balances of assets, liabilities and net assets for the earliest period for which retrospective restatement is practicable.

In the application of the NSF accounting policies management is required to make judgements, estimations and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on past experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Property, plant and equipment Management has made certain estimations with regards to the determination

of estimated useful lives and residual values of items of property, plant and equipment, as discussed further in note 1.10.1.

Leases Management has applied its judgement to classify all lease agreements

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that the entity is party to as operating leases, as they do not transfer substantially all the risks and rewards of ownership to the entity. Furthermore, as the operating lease in respect of office equipment is only for a relatively short period of time, management has made a judgement that it would classify the agreement in its entirety as an operating lease.

1.4 Going concern assumption

These financial statements have been prepared on the going concern basis. In assessing whether the NSF is a going concern, the Accounting Authority has considered the fact that the power to collect skills development levies will enable the NSF to be considered as a going concern for at least the next twelve months. The NSF surplus reserves will enable it to continue operating as a going concern.

1.5 Offsetting Assets, liabilities, revenues and expenses have not been offset except when

offsetting is required or permitted by the standard.

1.6 Comparative information

Budget information in accordance with GRAP 1 has been provided in the notes to the financial statements for the current financial year only, and forms part of the audited Annual Financial Statements. (Refer to note 32 for more detail).

When the presentation or classification of items in the Annual Financial Statements is amended, prior period comparative amounts are restated. The nature and reason for the reclassification is disclosed. Where accounting errors have been identified in the current year, the correction is made retrospectively as far as practicable, and the prior year comparatives are restated accordingly. Where there has been a change in accounting policy in the current year, the adjustment is made retrospectively as far as practicable, and the prior year comparatives are restated accordingly.

1.7 Events after reporting date

Events after the reporting date are those events, both favourable and unfavourable, that occur between the reporting date and the date when the financial statements are authorised for issue. Events after reporting date that are classified as adjusting events have been accounted for in the Annual Financial Statements. Events after reporting date that have been classified as non-adjusting events have been disclosed in the disclosure notes to the Annual Financial Statements.

1.8 Revenue recognition

Revenue is recognised when its probable that future economic benefits or service potential will flow to the entity, and the entity can measure the benefits reliably.

Accounting policy 1.8.1 on revenue from non-exchange transactions and accounting policy 1.8.2 on revenue from exchange transactions describes the conditions under which revenue will be recorded by the management of the entity.

In making their judgement, the management considered the detailed criteria for recognition of revenue as set out in GRAP 9 (revenue from exchange transactions). The management of the entity is satisfied that recognition of the revenue in the current year is appropriate.

When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with the transaction is recognised by reference to the stage of completion of the transaction at the end of the reporting period.

The outcome of a transaction can be estimated reliably when all the following conditions are satisfied:- the amount of revenue can be measured reliably;- it is probable that the economic benefits associated with the transaction

will flow to the company;

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- the stage of completion of the transaction at the end of the reporting period can be measured reliably; and

- the costs incurred for the transaction and the costs to complete the transaction can be measured reliably.

When the outcome of the transaction involving the rendering of services cannot be estimated reliably, revenue shall be recognised only to the extent of the expenses recognised that are recoverable. Service revenue is recognised by reference to the stage of completion of the transaction at the end of the reporting period.

Revenue is measured at the fair value of the consideration received or receivable and represents the amounts receivable for services provided in the normal course of business, net of value added tax.

1.8.1 Revenue from non-exchange transactions

Revenue from non-exchange transactions refers to transactions where the entity received revenue from another entity without directly giving approximately equal value in exchange. Revenue from non-exchange transactions is generally recognised to the extent that the related receipt or receivable qualifies for recognition as an asset and there is no obligation or condition to repay the amount.

1.8.1.1 Skills development levy (SDL) income

Skills development levy (SDL) transfers are recognised when it is probable that future economic benefits can be measured reliably, and occurs when the Department of Higher Education and Training (DHET) makes the allocation or the payment, whichever event comes first, to the National Skills Fund (NSF) as required by section 8 of the Skills Development Levies Act, 1999 (Act No. 9 of 1999). SDL income is measured at fair value of the consideration received and is based on the information supplied by DHET.

In terms of section 3(1) and 3(4) of the Skills Development Levies

Act, 1999 (Act No. 9 of 1999), registered member companies pay a skills development levy of 1% of the total payroll cost to the South African Revenue Services (SARS), who collects the levies on behalf of the Department of Higher Education and Training. 20% of the skills development levies are paid over to the NSF and 80% to the SETAs.

National Skills Fund SDL income is set aside in terms of the Skills Development Act, 1998 (Act No. 97 of 1998) as amended for the purpose of:

2014/15 2013/14 Employee costs and other operating expenditure of the NSF 10 % 10 %

According to section 28(2) of the Skills Development Act, 1998 (Act No. 97 of 1998), the Accounting Authority approved the utilisation of 10%

of the money allocated to the Fund in terms of section 8(3)(a) of the Skills

Development Levies Act, 1999 (Act No. 9 of 1999) to administer the fund. The utilisation of the 10% allocation may be applied for short-term employee benefits as well as other operating expenses.

1.8.1.2 State contributions

State contributions represents unconditional grants received from the Department of Higher Education and Training (DHET) and are measured at fair value of the consideration received.

1.8.1.3 Income from SETAs towards TVET college infrastructure development

Skills Development Circular No. 08/2013 stipulates the role of SETAs with regards to the TVET college infrastructure development. In terms of the circular, each SETAs’ contribution towards the TVET college infrastructure development is a fixed amount, which was based on 4.8% of the SETA’s estimated discretionary grant.

Income from SETAs towards the TVET college infrastructure development

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is recognised at fair value of the consideration received in the TVET college infrastructure development reserve as such funding is specifically received for use towards the TVET college infrastructure development. The related TVET college infrastructure development expenditure is also recognised against the TVET college infrastructure development reserve.

1.8.1.4 Income from SETAs uncommitted surpluses

On 3 December 2012, the Minister of Higher Education and Training published the new SETA grant regulations in terms section 36 of the Skills Development Act, 1998 (No. 97 of 1998) in Government Gazette No. 35940 to be effective from 1 April 2013. In terms of new SETA grant regulation 3(12), the uncommitted surpluses of the SETAs as at each year-end must be paid over by the SETA to the National Skills Fund by 1 October of each year. However, the SETA is allowed in terms of grant regulation 3(11) to retain a maximum of 5% of the uncommitted surpluses to be carried over to the next financial year. The SETA may also in terms of SETA grant regulation 3(12) submit a business case to the Minister requesting approval to carry over the surpluses where exceptional circumstances have led to projected under-spending. The approval of the business case for the retention of uncommitted surpluses is within the discretion of the Minister of Higher Education and Training. The SETAs must pay over their uncommitted surpluses to the NSF should the Minister not approve the SETAs business cases for retention of their uncommitted surpluses.

Income from SETAs uncommitted surplus is measured at fair value of the consideration received in the SETA uncommitted surplus reserve. Expenditure incurred on skills development funded from the SETA uncommitted surplus reserve is also recognised against the SETA uncommitted surplus reserve.

1.8.1.5 Finance income from SETA receivables for TVET college infrastructure development

Finance income represents interest earned on SETA receivables for TVET

college infrastructure development and is accrued on a time proportion basis, taking into account the principal amount outstanding and the effective interest rate over the period to maturity.

1.8.2 Revenue from exchange transactions

Revenue from exchange transactions refers to revenue that accrued to the entity directly in return for services rendered / goods sold, the value of which approximates the consideration received or receivable.

1.8.2.1 Finance income (from exchange transactions)

Finance income represents interest earned on investments and is accrued on a time proportion basis, taking into account the principal amount outstanding and the effective interest rate over the period to maturity.

1.8.2.2 Other income

Other income represents interest received by the training providers on the advance payments affected by NSF based on the approved memorandum of agreement entered into between the parties. This interest received by the training providers are utilised to incur project expenditure on behalf of NSF.

Other income is accrued on a time proportion basis, taking into account the principal amount outstanding and the effective interest rate over the period to maturity.

1.9 Expenditure

1.9.1 Collection costs paid to Sars

In terms of section 10(2) of the Skills Development Levies Act, 1999 (Act No. 9 of 1999), the Accounting Authority must, on a monthly basis as may agreed between SARS and the Accounting Authority, settle the costs of collection by SARS from the levies paid into the National Skills Fund. The total amount of the collection costs may not exceed 2% of the

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total amount of the levies collected by SARS.

1.9.2 NSF 10% employee costs and other operating expenses

According to section 28(2) of the Skills Development Act, 1998 (Act No. 97 of 1998), the Accounting Authority approved the utilisation of 10% of the money allocated to the fund in terms of section 8(3)(a) of the Skills Development Levies Act to administer the fund. The utilisation of the 10% allocation may be applied for short-term employee benefits as well as other operating expenses.

1.9.3 Short term employee benefits

Short-term employee benefits comprise of salaries, paid annual leave, paid sick leave, thirteenth cheques, performance bonuses and non-monetary benefits such as medical care, housing and car allowances. The cost of short term employee benefits are charged to the statement of financial performance as employee cost in the year to which they relate, except for non-accumulating benefits which are only recognised when the specific event occurs.

Short-term employee benefits that give rise to a present legal or constructive obligation are included in the statement of financial position as accruals in the year to which they relate.

1.9.4 Skills development grant disbursements

Skills development grant disbursements comprise:- costs that relate directly to the specific contract;- costs that are attributable to contract activity in general and can be

allocated to the project; and- such other costs as are specifically chargeable to the NSF under the

terms of the contract.

Skills development grant disbursements are recognised as expenses in the period in which they are incurred. Grant disbursements include the following:

1.9.4.1 Payments for training of unemployed people

The training of unemployed people is undertaken by selected training contractors on a basis of a predetermined course fee per day. Upon completion of the training, certified claims are submitted by training contractors upon which payments are made.

1.9.4.2 Funds allocated to training providers for skills development training

The NSF allocates funds in respect of skills development to training providers in terms of approved memorandum of agreements entered into between the parties. Funds not spent by the training providers at year-end are accounted for as pre-paid expenditure in the financial statements of the NSF until the related eligible project expense are incurred by the training providers and the relating expenditure recognised. If eligible expenses are not incurred, the amount allocated to the training providers should be refunded to the NSF including any accrued interest.

1.9.5 Fruitless and wasteful expenditure

Fruitless and wasteful expenditure means expenditure that was made in vain and would have been avoided had reasonable care been exercised.

Fruitless and wasteful expenditure is recognised as expenditure in the statement of financial performance according to the nature of the payment and not as a separate line item on the face of the statement. if the expenditure is recoverable it is treated as an asset until it is recovered from the responsible person or written off as irrecoverable in the statement of financial performance.

1.9.6 Irregular expenditure

Irregular expenditure comprises expenditure, other than unauthorised expenditure, incurred in contravention of or that is not in accordance with a requirement of any applicable legislation, including: the Public Finance Management Act (Act No. 1 of 1999)(as amended by Act 29 of 1999), the State Tender Board Act, 1968 (Act No. 86 of 1968), or

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any regulation made in terms of that Act), or any provincial legislation providing for the procurement procedures in that provincial government.

Irregular expenditure is recognised as expenditure in the statement

of financial performance. if the expenditure is not condoned by the relevant authority it is treated as an asset until it is recovered or written off as irrecoverable.

1.10 Assets

1.10.1 Property, plant and equipment

The Director-General of the Department of Higher Education and Training is the Accounting Authority of the Fund in terms of the PFMA and must control the Fund.

Property, plant and equipment comprise mainly of computer equipment, office equipment, office furniture and office appliances.

Property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Depreciation is calculated using the straight-line method to allocate their cost to their residual values over their estimated useful lives, as follows:- Computer equipment: 3 years- Office equipment: 5 years- Office furniture: 5 years- Office appliances: 5 years

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

An asset’s carrying amount is written down immediately to its recoverable

amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within surplus/deficit in the statement of financial performance.

1.10.2 Property, plant and equipment acquired by project implementing agencies

for NSF special projects

Property, plant and equipment acquired by project implementing agencies for NSF special projects are capitalised in the financial statements of the respective agencies, as the agencies control such assets for the duration of the project.

1.10.3 Intangible assets

The Director-General of the Department of Higher Education and Training is the Accounting Authority of the Fund in terms of the PFMA and must control the Fund.

Intangible comprise mainly of computer software. Intangible assets are stated at historical cost less amortisation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Amortisation is calculated using the straight-line method to allocate their cost to their residual values over their estimated useful lives, as follows:- Computer software: 3 years

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within surplus/deficit in the statement of financial performance.

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1.10.4 TVET college infrastructureassets

TVET college infrastructure assets comprise of TVET college campuses developed on behalf of the respective colleges.

The TVET college infrastructure development is financed by the NSF and is centrally implemented by the Department of Higher Education and Training as the implementing agency for the NSF. The ultimate beneficiaries of the TVET college infrastructure assets are the respective colleges to whom the assets will be transferred upon completion thereof.

The NSF shall recognise the cost of the TVET college infrastructure assets as an asset if, and only if:(a) it is probable that future economic benefits or service potential

associated with the item will flow to the NSF; and(b) the cost or fair value of the item can be measured reliably.

The NSF shall derecognise the TVET college infrastructure asset upon transfer thereof to the respective colleges.

TVET college infrastructure assets are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items, which includes site preparation costs.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within surplus/deficit in the Statement of financial performance.

1.10.5 Deferred expenditure on skills development grant disbursements

Deferred expenditure represents grant disbursement made in advance to training providers based on the signed memorandum of agreement between the parties. Deferred expenditure can be classified as either paid

(cash flow payments were made) or incurred based on the stipulations contained in the memoranda of agreements. Deferred expenditure paid reflects the outstanding capital amounts as well as accrued interest received by the training providers at financial year-end. NSF will only be entitled to the unspent funds, including any accrued interest, at the end of the project term.

Deferred expenditure is initially recognised at cost and subsequently measured at fair value less any provision for impairment.

1.10.6 Trade and other receivables from non-exchange transactions

Trade and other receivables from non-exchange transactions are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. The provision is made in accordance with GRAP 104.64 whereby the recoverability of the outstanding advance is assessed individually and then collectively after grouping the assets in financial assets with similar credit risks characteristics.

1.10.7 Cash and cash equivalents

Cash includes cash on hand (including petty cash) and cash with banks (including call deposits). Cash equivalents are short-term highly liquid investments, readily convertible into known amounts of cash, that are held with registered banking institutions with maturities of three months or less and are subject to an insignificant risk of change in value.

In terms of section 29(2) of the Skills Development Act, 1998 (Act No. 97 of 1998) any money in the Fund not required for immediate use should be invested with the Public Investment Corporation (PIC). Cash and cash equivalents are measured at fair value.

For purposes of cash flow statement, cash and cash equivalents comprise cash on hand, deposits held at call with banks and investments in financial instruments.

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1.11 Liabilities

1.11.1 Defined contribution plans

A defined contribution plan is a plan under which the entity pays fixed contributions into a separate entity. The entity has no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to service in the current or prior periods.

The NSF provides for retirement benefits for all its permanent employees through a defined contribution scheme that is subject to the Pension Funds Act, 1956 (Act No. 24 of 1956) as amended. In terms of the Pension Funds Act, the Fund is not required to be actuarially valued. Contributions are at a rate of 13% of pensionable emoluments. The entity’s contributions to the defined benefit contribution scheme are established in terms of the rules governing the scheme.

Contributions are recognised in the statement of financial performance in the period in which the service is rendered by the relevant employees. The entity has no further payment obligations once the contributions have been paid.

1.11.2 Leave and bonus accruals

The entity has opted to treat its provision for leave and bonus pay as an accrual.

The cost of all short-term employee benefits is recognised during the period in which the employee renders the related service. Employee entitlements are recognised when they accrue to employees. An accrual is recognised for the estimated liability as a result of services rendered by employees up to the reporting date. Accruals related to employee benefits included in the statement of financial position includes annual leave, capped leave, thirteenth cheque as well as performance bonus commitments at year-end (based on current salary rates).

The liability for leave pay is based on the total accrued leave days at year end and is shown as an accrual in the statement of financial position. The entity recognises the expected cost of performance bonuses only when the entity has a present legal or constructive obligation to make such payment and a reliable estimate can be made. No accrual is made for post retirement benefits, as the NSF does not provide for such benefits for its employees.

1.11.3 Payables to skills development programmes and projects

Due to the nature of the NSF operations, numerous contracts exists that requires management estimation and judgement to determine the provision amount at financial year end relating to possible services rendered on these contracts not yet invoiced/claimed by the training providers.

Payables to skills development programmes and projects include accruals for programmes and projects that are estimated on an annual basis. These estimates and underlying assumptions are reviewed on an ongoing basis. For purposes of the accrual calculations, management deems the training be rendered equally over the original contract term, while taking into consideration historical performance trends on each contract. These estimates are based on the remaining portion of the contract for a specific year that has not been invoiced/claimed by the training providers. Actual results may differ from these estimates. Accruals recognised for the relevant financial year are deducted from the remaining contract commitment.

No accrual is made for projects approved at year-end, unless the service in terms of the contract has been delivered or the contract is of an onerous nature. Where a project has been approved, but has not been accrued for or provided for, it is disclosed as commitments in the notes to the financial statements.

1.11.4 Provisions

In terms of GRAP 19 a provision is defined as a liability of uncertain

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timing or amount. Provisions can be distinguished from other liabilities such as payables and accruals because there is uncertainty about the timing or amount of the future expenditure required in settlement.

1.11.4.1 Provision for levies less than threshold

Section 4(b) of the Skills Development Levies Act, (Act No. 9 of 1999) stipulates that employers with a total yearly remuneration expense of below R500 000 are exempt from contributing skills development levies. In practice it does happen that some of these exempted employers contribute skills development levies. As a result, they are entitled to claim their contributions back. There is uncertainty over the timing and amount of the provision for levies paid below threshold, as the NSF does not know the amount or time of contributions that will be claimed back in the future. For purposes of calculating the provision, management expects the future claims to be in line with the historic levies less than threshold claimed back. The historic levies less than threshold claimed back in comparison with total skills development levies received is used as a basis for estimating the provision.

1.11.4.2 Provision for performance bonuses

Performance bonuses are provided for based on the NSF’s past practice to pay annual performance bonuses. Uncertainty exists over the amount and the timing of the performance bonuses as NSF has not yet completed the performance assessments at year-end and determined the performance bonus payable. Management estimates the performance bonus payable to be in line with the prior period’s performance bonus paid with an average increase for inflation.

1.12 Financial instruments

The entity has various types of financial instruments and these can be broadly categorised as either financial assets or financial liabilities. The classification of financial assets and liabilities, into categories, is based on judgement by management.

Financial assets and financial liabilities are recognised on the NSF statement of financial position when the NSF becomes a party to the contractual provisions of the instrument.

Financial instruments are initially measured at fair value. Subsequent to initial recognition these instruments are measured as set out below.

1.12.1 Financial assets - classification

A financial asset is any asset that is a cash or contractual right to receive cash. The entities principle financial assets as reflected on the face of the statement of financial position are classified as follows:

- Cash and cash equivalents;- Financial assets at fair value; and- Trade and other receivables.

In accordance with GRAP 104 the financial assets of the entity are classified as follows into the categories as allowed by the standard:

Type of financial asset Classification in terms of GRAP 104

Cash and cash equivalents Financial assets at fair value

Financial assets at fair value through surplus or deficit

Financial assets at amortised cost

Trade and other receivables Financial assets at cost

Cash includes cash on hand (including petty cash) and cash with banks (including call deposits). Cash equivalents are short-term highly liquid investments, readily convertible into known amounts of cash, that are held with registered banking institutions with maturities of three months or less and are subject to an insignificant risk of change in value. For purposes of the statement of cash flow, cash and cash equivalents comprise cash on hand, deposits held at call with banks, and investments in financial instruments. The entity categorises cash and cash equivalents as financial assets: Loans and receivables.

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Financial assets at fair value are financial assets that meet either of the following conditions:- They are classified as held for trading; or- Upon initial recognition they are designated as at fair value through

the statement of financial performance. Financial assets at amortised cost are non-derivative financial assets

with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than twelve months, which are classified as non-current assets. Loans and receivables are initially measured at cost which represents fair value. After initial recognition financial assets are measured at amortised cost, using the effective interest method less provision for impairment.

1.12.2 Financial liabilities - classification

A financial liability is a contractual obligation to deliver cash or another financial asset to another entity, or exchange financial assets or financial liabilities under conditions that are potentially unfavourable to the entity. The entities principal financial liabilities relates to accounts payable which are classified as follows on the face of the statement of financial position:

- Trade and other payables.

There are two main categories of financial liabilities, the classification based on how they are measured. Financial liabilities may be measured at:

- Fair value through surplus or deficit; or- At amortised cost using the effective interest method.

Financial liabilities at fair value are financial liabilities that are essentially held for trading (ie purchased with the intention to sell or repurchase in the short term; derivatives other than hedging instruments or are part of a portfolio of financial instruments where there is recent actual

evidence of short-term profiteering or are derivatives). Financial liabilities that are measured at fair value through surplus or deficit are stated at fair value, with any resulted gain or loss recognised in the statement of financial performance.

Any other financial liabilities are classified as other financial liabilities and are initially measured at fair value. Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.

In accordance with GRAP 104 the Financial Liabilities of the entity are all classified as “other financial liabilities”.

1.12.3 Initial and subsequent measurement

1.12.3.1 Financial assets: Financial assets at fair value through surplus/deficit

Money market financial instruments are initially and subsequently measured at fair value. It is the policy of NSF to account for changes in the fair value of monetary securities classified at fair value, through the statement of financial performance. The fair value adjustment is calculated between the difference of the market value at the end of the reporting period and the cost of the investment. These investments are revaluated once a year at the end of the reporting period.

1.12.3.2 Financial assets: Trade and other receivables

Trade and other receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

1.12.3.3 Financial liabilities: Trade and other payables

Trade and other payable financial instruments are measured at amortised cost using the effective interest rate method. Accruals represent goods/services that have been received together with an accompanied invoice but final authorisation to affect payment has not been effected. Accruals

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are recognised in the statement of financial position as trade and other payables.

1.12.4 Impairment of financial assets

Financial assets, other than those at fair value through surplus or deficit, are assessed for indicators of impairment at each reporting date. Financial assets are impaired where there is objective evidence of impairment of Financial Assets (such as the probability of insolvency or significant financial difficulties of the debtor). If there is such evidence the recoverable amount is estimated and an impairment loss is recognised in accordance with GRAP 104.

Accounts receivable are initially valued at cost, which represents fair value, and subsequently carried at amortised cost using the effective interest rate method. An estimate is made for a provision for impairment based on past default experience of all outstanding amounts at year-end. Bad debts are written off the year in which they are identified as irrecoverable. Amounts receivable within 12 months from the date of reporting are classified as current.

A provision for impairment of accounts receivable is established when there is objective evidence that NSF will not be able to collect all amounts due according to the original terms of the receivables. The amount of the provision is based on long outstanding non-active supplier contracts where the recovery of the outstanding amount is uncertain as no new contracts exist for the recovery of the outstanding balance. Based on past default experience it is the policy of the entity to provide for 50% of non-active contracts between 180 days and 270 days outstanding and 100% of non-active contracts exceeding 270 days.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. Changes in the carrying amount of the allowance account

are recognised in the statement of financial performance. When the receivable is uncollectable, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited to the statement of financial performance.

1.12.5 Impairment and gains and losses from subsequent measurement

A gain or loss arising from a change in the fair value of a financial asset or financial liability measured at fair value shall be recognised in surplus or deficit.

For financial assets and financial liabilities measured at amortised cost or cost, a gain or loss is recognised in surplus or deficit when the financial asset or financial liability is derecognised or impaired, or through the amortisation process.

1.12.6 Derecognition of financial assets

A financial asset or a portion thereof is derecognised when the NSF realises the contractual rights to the benefits specified in the contract, the rights expire, the NSF surrenders those rights or otherwise loses control of the contractual rights that comprise the financial asset. On derecognition, the difference between the carrying amount of the financial asset and the sum of the proceeds receivable and any prior adjustment to reflect the fair value of the asset that had been reported in capital and reserves is included in net surplus or deficit for the period.

If the entity neither transfers nor retains substantially all the risks and

rewards of ownership and continues to control the transferred asset, the entity recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the entity retains substantially all the risks and rewards of ownership of a transferred financial asset, the entity continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

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1.12.7 Derecognition of financial liabilities

A financial liability or a part thereof is derecognised when the obligation specified in the contract is discharged, cancelled, or expires. On derecognition, the difference between the carrying amount of the financial liability, including related unamortised costs, and the amount paid for it is included in net surplus or deficit for the period.

1.12.8 Fair value considerations

The fair values at which financial instruments are carried at the reporting date have been determined using available market values. Where market values are not available, fair values have been calculated by discounting expected future cash flows at prevailing interest rates. The fair values have been estimated using available market information and appropriate valuation methodologies, but are not necessarily indicative of the amounts that the NSF could realise in the normal course of business. The carrying amounts of financial assets and financial liabilities with a maturity of less than one year are assumed to approximate their fair value due to the short-term trading cycle of these items.

1.12.9 Risk management of financial assets and liabilities

It is the policy of the entity to disclose information that enables the user of its financial statements to evaluate the nature and extent of risks arising from financial instruments to which the entity is exposed on the reporting date.

Risks and exposure are disclosed as follows:

1.12.9.1 Credit risk:

- Each class of financial instrument is disclosed separately;- Maximum exposure to credit risk not covered by collateral is specified;

and- Financial instruments covered by collateral are specified.

1.12.9.2 Liquidity risk:

A maturity analysis for financial assets and liabilities that shows the remaining contractual maturities.

Liquidity risk is managed by ensuring that all assets are reinvested at maturity at competitive interest rates in relation to cash flow requirements. Liabilities are managed by ensuring that all contractual payments are met on a timeous basis and, if required, additional new arrangements are established at competitive rates to ensure that cash flow requirements are met.

A maturity analysis for financial liabilities (where applicable) that shows the remaining undiscounted contractual maturities is disclosed in note 25 to the annual financial statements.

1.13 Related parties

1.13.1 Related party transactions

Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial and operating decisions or if the related party entity and another entity are subject to common control.

Related party transactions are classified by the entity as those transactions between related parties other than transactions that would occur within a normal supplier or client/recipient relationship on terms and conditions no more or less favourable than those which it is reasonable to expect the entity would have adopted if dealing with that individual or entity at arm’s length in the same circumstances. Only transactions with related parties not at arm’s length or not in the ordinary course of business are disclosed.

1.13.2 Key management personnel

Key management personnel is defined as being individuals with the authority and responsibility for planning, directing and controlling

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the activities of the entity, including those charged with the governance of the entity in accordance with legislation, in instances where they are required to perform such functions. Close members of the family of a person are considered to be those family members who may be expected to influence, or be influenced by, that management in their dealings with the entity.

The executive officer (EO) of NSF on post level 14 is currently regarded as being at key management level including employees on level 13 or below acting in the position of the EO. Transactions conducted with key management, as well as with close family members of key management, is regarded as related party transactions. Only transactions with related parties not at arm’s length or not in the ordinary course of business are disclosed.

1.14 Commitments and earmarked funds

1.14.1 Commitments

Commitments only include funds that have been committed contractually at year-end. Funds committed contractually are commitments where the NSF has a contractual obligation to fund the skills development programme/project or administrative projects. With a contractual obligation there is a written agreement with specific terms between the NSF and the third party, whereby the third party undertakes to perform certain deliverables as outlined in the agreement. Performance on these deliverables will obligate the NSF to make payment.

1.14.2 Earmarked funds

Earmarked funds includes the following:

i. Funds earmarked towards skills development programmes and projects, that have been approved at year-end, but not yet contracted

Funds earmarked towards skills development programmes/projects, that have been approved at year-end, but not yet contracted are skills

development programmes/projects that have been approved by the Director-General of Higher Education and Training as at year-end, but have not yet been contracted as contracting is still in process as at year-end and will be concluded after year-end.

ii. Funds earmarked towards skills development programmes and projects, that have been recommended for approval at year-end, but have not yet been approved or contracted

Funds earmarked towards skills development programmes and projects, that have been recommended for approval at year-end, but have not been approved and contracted are skills development programmes/projects that have been recommended to the Director-General of Higher Education and Training for approval before year-end for which approval and contracting will take place after year-end.

iii. Funds earmarked towards constructive commitments arising from annual allocations to ongoing skills development programmes and projects

Funds earmarked towards constructive commitments are funds that the NSF commits on an annual basis towards ongoing skills development programmes and projects. Due to this established pattern of past practice the NSF has created a valid expectation on the part of the third parties, that it will continue to fund these skills development programmes and projects on an annual basis.

1.15 Contingent assets and contingent liabilities

Management judgement is obtained through the services of legal counsel when disclosing contingent assets and liabilities. The probability that an inflow or outflow of economic resources will occur due to past events, which will only be confirmed by the occurrence or non-occurrence of one or more future events as well as any possible financial impact is disclosed based on management estimation in the disclosure notes.

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1.16 New standards and interpretations (igrap) issued but not yet effective as at 31 March 2015:

The following GRAP standards have been issued but are not yet effective and have not been early adopted by the entity:

- GRAP 18: Segment reporting: (Effective date: Not Announced) The standard is to establish principles for reporting financial

information by segments. The disclosure of this information will:

(a) Enable users of the financial statements to better understand the entity’s past performance, to evaluate the nature and financial effects of the activities in which it engages and the economic environments in which it operates;

(b) Identify the resources allocated to support the major activities of the entity and assist in making decisions about the allocation of resources; and

(c) Enhance the transparency of financial reporting and enable the entity to better discharge its accountability obligations.

- GRAP 20: Related party disclosure

The standard is to ensure that a reporting entity’s financial statements contain the disclosures necessary to draw attention to the possibility that its financial position and surplus or deficit may have been affected by the existence of related parties and by transactions and outstanding balances with such parties

- GRAP 32: Service Concession Arrangements: Grantor The Standard prescribes the accounting for service concession

arrangements by the grantor, a public sector entity.

- GRAP 105: Transfer of functions between entities under common control (Effective date: Not announced)

The standard establishes accounting principles for the acquirer and transferor in a transfer of functions between entities under common control.

- GRAP 106: Transfers of functions between entities not under common control (Effective date: Not announced)

The standard establishes accounting principles for the acquirer in a transfer of functions between entities not under common control.

- GRAP 107: Mergers (Effective date: Not announced) The standard establishes accounting principles for the combined

entity and combining entities in a merger.

- GRAP 108: Statutory Receivables The standard prescribes accounting requirements for the recognition,

measurement, presentation and disclosure of statutory receivables.

Application of all of the above GRAP standards will be effective from the date as announced by the minister of finance. Currently not all of these dates have been announced.

The following interpretations (IGRAP) have been issued but not yet effective and have not been early adopted by the entity

- IGRAP 7: The limit on defined benefit asset, minimum funding requirements and their interaction

- IGRAP 11: Consolidation - Special Purpose Entities

- IGRAP 12: Jointly Controlled Entities – Non Monetary Contributions by Venturers

- IGRAP 17: Interpretation of the Standard of GRAP on Service Concession Arrangements Where a Grantor Controls a Significant Residual Interest in an Asset

Management has considered all of the above-mentioned GRAP standards issued (both effective and non effective) and anticipates that the adoption of these standards will not have a significant impact on the financial performance, financial position or cash flows of the entity.

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Notes to the Annual Financial Statements

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2. PROPERTY, PLANT AND EQUIPMENT

Reconciliation of cost to net book value

2014/15R’000

2013/14R’000

Owned assets Cost Accumulated depreciation

Carrying Value Cost Accumulateddepreciation

Carrying Value

Computer equipment 9 038 (2 134) 6 904 815 (236) 579

Office furniture 3 176 (291) 2 885 191 (16) 175

Office appliance 98 (7) 91 13 (2) 11

Office equipment 160 (17) 143 1 (1) -

Total 12 472 (2 449) 10 023 1 020 (255) 765

Reconciliation of opening to closing net book value

2014/15R’000

Owned assets Carrying value at beginning of year Additions Disposals Depreciation Carrying value at end

of year

Computer equipment 579 8 242 (18) (1 899) 6 904

Office furniture 175 3 190 (147) (333) 2 885

Office appliance 11 85 - (5) 91

Office equipment - 159 - (16) 143

Total 765 11 676 (165) (2 253) 10 023


116

Notes to the Annual Financial Statements2. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)


2013/14R’000


of year

Office furniture - 191 - (16) 175

Office appliance - 13 - (2) 11

Office equipment - 2 - (2) -

Computer equipment 102 690 - (213) 579

Total 102 896 - (233) 765

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3. INTANGIBLE ASSETS

Reconciliation of cost to net book value

2014/15R’000

2013/14R’000

Owned assets Cost Accumulated depreciation

Carrying Value Cost Accumulateddepreciation

Carrying Value

Computer software 2 223 (526) 1 697 279 (54) 225

Total 2 223 (526) 1 697 279 (54) 225


2014/15R’000


of year

Computer software 225 1 943 - (471) 1 697

Total 225 1 943 - (471) 1 697


2013/14R’000


of year

Computer software 279 - - (54) 225

Total 279 - - (54) 225

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Notes to the Annual Financial Statements4. TVET COLLEGE INFRASTRUCTURE ASSETS Reconciliation of cost to net book value

TVET college infrastructure assets 2014/15R’000

2013/14Restated R’000

Site TVETcollege Cost Accumulated

depreciationCarrying

value Cost Accumulateddepreciation

Carryingvalue

Aliwal North Ikhala 10 338 - 10 338 9 870 - 9 870Balfour Gert Sibande 10 513 - 10 513 10 044 - 10 044Bhambanana Umfolozi 25 655 - 25 655 9 870 - 9 870Giyani Letaba 10 362 - 10 362 9 893 - 9 893Graaf-Reinet Eastern Cape Midlands 10 338 - 10 338 9 870 - 9 870Greytown Umgungundlovu 10 338 - 10 338 9 870 - 9 870Kwagqikazi Mthashana 10 369 - 10 369 9 901 - 9 901Msinga Umgungundlovu 10 338 - 10 338 9 870 - 9 870Ngqungqushe (Lusikisiki)

Ingwe 10 338 - 10 338 9 870 - 9 870

Nkandla A Umfolozi 23 517 - 23 517 9 870 - 9 870Nkandla B Umfolozi 10 338 - 10 338 9 870 - 9 870Nongoma Mthashana 10 351 - 10 351 9 882 - 9 882Sterkspruit Ikhala 10 365 - 10 365 9 896 - 9 896Thabazimbi Waterberg 65 761 - 65 761 9 870 - 9 870Umzimkhulu Esayidi 10 378 - 10 378 9 909 - 9 909Vryheid Mthashana 10 338 - 10 338 9 870 - 9 870Total 249 637 - 249 637 158 225 - 158 225

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Notes to the Annual Financial Statements4. TVET COLLEGE INFRASTRUCTURE ASSETS (CONTINUED) Reconciliation of opening to closing net book value

2014/15R’000

TVET college infrastructure assets Carrying value at beginning of year Additions Disposals Depreciation Carrying value at end

of yearSite TVET college

Aliwal North Ikhala 9 870 468 - - 10 338

Balfour Gert Sibande 10 044 469 - - 10 513

Bhambanana Umfolozi 9 870 15 785 - - 25 655

Giyani Letaba 9 893 469 - - 10 362

Graaf-Reinet Eastern Cape Midlands 9 870 468 - - 10 338

Greytown Umgungundlovu 9 870 468 - - 10 338

Kwagqikazi Mthashana 9 901 468 - - 10 369

Msinga Umgungundlovu 9 870 468 - - 10 338

Ngqungqushe (Lusikisiki)

Ingwe 9 870 468 - - 10 338

Nkandla A Umfolozi 9 870 13 647 - - 23 517

Nkandla B Umfolozi 9 870 468 - - 10 338

Nongoma Mthashana 9 882 469 - - 10 351

Sterkspruit Ikhala 9 896 469 - - 10 365

Thabazimbi Waterberg 9 870 55 891 - - 65 761

Umzimkhulu Esayidi 9 909 469 - - 10 378

Vryheid Mthashana 9 870 468 - - 10 338

Total 158 225 91 412 - - 249 637

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Notes to the Annual Financial Statements4. TVET COLLEGE INFRASTRUCTURE ASSETS (CONTINUED) Reconciliation of opening to closing net book value

2013/14RestatedR’000

TVET college infrastructure assets Carrying value at beginning of year Additions Disposals Depreciation Carrying value at end

of yearSite TVET college

Aliwal North Ikhala - 9 870 - - 9 870

Balfour Gert Sibande - 10 044 - - 10 044

Bhambanana Umfolozi - 9 870 - - 9 870

Giyani Letaba - 9 893 - - 9 893

Graaf-Reinet Eastern Cape Midlands - 9 870 - - 9 870

Greytown Umgungundlovu - 9 870 - - 9 870

Kwagqikazi Mthashana - 9 901 - - 9 901

Msinga Umgungundlovu - 9 870 - - 9 870

Ngqungqushe (Lusikisiki)

Ingwe - 9 870 - - 9 870

Nkandla A Umfolozi - 9 870 - - 9 870

Nkandla B Umfolozi - 9 870 - - 9 870

Nongoma Mthashana - 9 882 - - 9 882

Sterkspruit Ikhala - 9 896 - - 9 896

Thabazimbi Waterberg - 9 870 - - 9 870

Umzimkhulu Esayidi - 9 909 - - 9 909

Vryheid Mthashana - 9 870 - - 9 870

Total - 158 225 - - 158 225

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Notes to the Annual Financial Statements4. TVET COLLEGE INFRASTRUCTURE ASSETS (CONTINUED)

TVET college infrastructure assets comprise of the above TVET college campuses that are still in development as at year-end. The TVET college campuses are being developed on behalf of the respective colleges as outlined above.

Skills Development Circular No. 08/2013 calls on NSF and the SETAs to contribute towards funding the TVET college infrastructure development in support of Goal 4.3 of the National Skills Development Strategy III (NSDS III), which promotes growth of the public technical and vocational education and training college system that is responsive to sector, local, regional and national skills needs and priorities.

The SETAs contribution of R1 billion was paid over to the NSF as an unconditional grant. The TVET college infrastructure development is financed by the NSF and is centrally implemented by the Department of Higher Education and Training as the implementing agency for the NSF. The ultimate beneficiaries of the TVET college infrastructure assets are the respective colleges as outlined above to whom the assets will be transferred upon completion thereof. Hence, the NSF is responsible for recognising the assets while under construction until completion and transfer thereof to the respective colleges.

5. INVESTMENTS

It is the policy of NSF to account for changes in the fair value of monetary securities classified as held for trading through the statement of financial performance. The fair value adjustment is calculated as the difference between the market value at the end of the reporting period and the cost of the investment. These investments are revalued once a year at the end of the reporting period by the Public Investment Corporation (PIC). The latest revaluation was performed on 31 March 2015.

2014/15 2013/14Notes R'000 R'000

Composition at fair valueInvestments with the Public Investment Corporation (PIC) 7 931 051 5 797 841

Financial assets at fair value through surplus/(deficit) can be reconciled as follows:Balance at the beginning of the year 5 797 841 7 346 649

Invested during the year 3 506 825 3 498 659

Interest received and capitalised 16. 421 802 354 612

Management fees and expenses 21. (2 314) (2 079)

Withdrawal (1 800 000) (5 400 000)

Fair value adjustment 6 896 -

Closing balance end of year (None of the financial assets are impaired) 7 931 051 5 797 841

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Notes to the Annual Financial Statements5. INVESTMENTS (CONTINUED)

The NSF has committed its entire investment balance as at year-end. Refer to note 24.

NSF assesses at each reporting date whether there is objective evidence that a financial asset or group financial assets are impaired. None of the financial assets at fair value through surplus/(deficit) are impaired on reporting date.

The Skills Development Act state that the NSF may, if not otherwise specified by the Public Finance Management Act, invest the moneys in accordance with the approved NSF investment policy.

Treasury Regulation 31.3 requires that, unless exempted by the National Treasury, the NSF as a public entity that is listed in Schedule 3A of the Public Finance Management Act must invest surplus funds with the Corporation for Public Deposits. The NSF obtained exemption from National Treasury to invest surplus funds with the Public Investment Corporation (PIC) in accordance the NSF’s investment policy.

6. TRADE AND OTHER RECEIVABLES FROM EXCHANGE TRANSACTIONS

2014/15 2013/14Notes R'000 R'000

The carrying and fair value of trade and other receivables from exchange transactions are as follows:

Receivables from administrative expenditure 15 -

Closing balance end of year 15 -

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Notes to the Annual Financial Statements7. TRADE AND OTHER RECEIVABLES FROM NON-EXCHANGE TRANSACTIONS

2014/15 2013/14Restated

Notes R’000 R’000

NON-CURRENT

The carrying and fair value of non-current trade and otherreceivables from non-exchange transactions are as follows:

SETA receivables for TVET college infrastructure development - 185 528Carrying amount - 185 528

Less: Provision for impairment - -

Non-current trade and other receivables - Closing balance end of year - 185 528

CURRENT

The carrying and fair value of current trade and other receivablesfrom non-exchange transactions are as follows:

Receivables from skills development programmes and projects 7.1 30 061 56 423Carrying amount 58 276 67 862

Less: Provision for impairment 7.2 (28 215) (11 439)

SETA receivables for TVET college infrastructure development 7.1 150 050 377 746Carrying amount 150 050 377 746

Less: Provision for impairment 7.2 - -

SETA receivable from SETAs uncommitted surpluses 7.1 339 980 -

Carrying amount 339 980 -

Less: Provision for impairment 7.2 - -

Current trade and other receivables - Closing balance end of year 520 091 434 169

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Trade and other receivables from non-exchange transactions are all considered for impairment. Based on past default experience it is the policy of the entity to provide for 50% of non-active contracts between 180 days and 270 days outstanding and 100% of non-active contracts exceeding 270 days.

As at 31 March 2015, R23.3 million (2013/14: R23.732 million) trade and other receivables from non-exchange transactions were more than 180 days past due and not impaired due to the fact that these contracts are still active. The aging of trade and other receivables from non-exchange transactions that is not impaired is as follows:

2014/15 R’000

Current 31-180 days 181 to 270days

Over 270days

Total

Receivables from skills development programmes and projects 2 949 3 802 13 630 9 680 30 061

SETA receivables for TVET colleges infrastructure development 150 050 - - - 150 050

SETA receivables from SETAs uncommitted surpluses 339 980 - - - 339 980

492 979 3 802 13 630 9 680 520 091



Over 270days

Total

Receivables from skills development programmes and projects 4 679 11 226 1 718 27 361 44 984

SETA receivables for TVET colleges infrastructure development 563 274 - - - 563 274

SETA receivables from SETAs uncommitted surpluses - - - - -

567 953 11 226 1 718 27 361 608 258

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Notes to the Annual Financial Statements7. TRADE AND OTHER RECEIVABLES FROM NON-EXCHANGE TRANSACTIONS (CONTINUED)

7.1 Ageing of trade and other receivables from non-exchange transactions impaired

As at 31 March 2015, gross trade and other receivables of R28.215 million (2013/14: R28.215 million) were impaired and provided for. The amount of the provision is R28.215 million (2013/14: R11.439 million). The aging of the gross impaired trade and other receivables of R28.215 million (2013/14: R11.439 million) is stipulated as follows:

2014/15 R’000


Over 270days

Total

Receivables from skills development programmes and projects - - - 28 215 28 215

SETA receivables for TVET colleges infrastructure development - - - - -


- - - 28 215 28 215



Over 270days

Total

Receivables from skills development programmes and projects - - - 11 439 11 439

SETA receivables for TVET colleges infrastructure development - - - - -


- - - 11 439 11 439

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Notes to the Annual Financial Statements7. TRADE AND OTHER RECEIVABLES FROM NON-EXCHANGE TRANSACTIONS (CONTINUED)

7.2 Reconciliation of provision for impairment

2014/15 2013/14Restated


Opening balance 11 439 16 619

(Utilised)/Provided during the year 20. 16 777 (5 180)

Provision reversed during the year - -

Closing balance end of year 28 215 11 439

Current year attributable to:

Advances to training providers for payment of allowances - -

Opening balance - 5 180

Utilised during the year - (5 180)

Receivables from skills development projects 28 216 11 439Opening balance 11 439 11 439

Provided during the year 16 777 -

Provision reversed during the year - -


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Trade and other receivables are individually impaired when there is objective evidence that the asset is impaired. The creation and release of the provision for impaired receivables have been included in the statement of financial performance. Amounts charged to the allowance account are generally written off when there is no expectation of recovering additional cash.

The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable as mentioned above.

Credit quality of trade and other receivables from exchange transactions

Management considers that all of the above financial assets are of good credit quality, excluding R28.215 million of the PSETA trade receivable which is not considered recoverable. The maximum exposure to credit risk at reporting date is the fair value of each class of receivables as mentioned above.

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7. TRADE AND OTHER RECEIVABLES FROM NON-EXCHANGE TRANSACTIONS (CONTINUED)

7.2 Reconciliation of provision for impairment (continued)


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Notes to the Annual Financial Statements8. DEFERRED EXPENDITURE ON SKILLS DEVELOPMENT GRANT DISBURSEMENTS

2014/15 2013/14Restated


NSA Ministerial 8 655 - Constituency capacity building 8 655 -

Government Priorities 497 665 782 438 New growth path 46 602 178 021 Industrial policy action plan 50 957 16 716 Rural development 53 106 71 034 Education and health 6 849 4 687 Justice and crime prevention 4 500 - Co-operatives and small enterprises 56 588 63 059 Public sector capacity 279 063 448 921

Director-General Priorities 562 089 643 323 Worker education 2 644 2 588 Skills system capacity building 10 934 8 209 Bursaries 548 214 632 526 Academia, research and development 297 -

Skills Infrastructure 171 295 205 114 Public delivery infrastructure 171 295 200 002 Community education centres - 5 112

HRDSSA 2 378 800 Research 2 378 800

Closing balance end of year 1 242 082 1 631 675

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Notes to the Annual Financial Statements8. DEFERRED EXPENDITURE ON SKILLS DEVELOPMENT GRANT DISBURSEMENTS (CONTINUED)

Deferred expenditure represents skills development grant disbursements paid or payable in advance to skills development providers based on the signed contractual agreement between the parties. In terms or the signed contractual agreement between the NSF and the skills development providers, the NSF disburses grants quarterly in advance.

Deferred expenditure reflects the outstanding capital amounts, including accrued interest received by the skills development providers on the advance payments at financial year-end. NSF will only be entitled to the unspent funds, including any accrued interest, at the end of the programme or project term or upon termination of the contract.

9. CASH AND CASH EQUIVALENTS

2014/15 2013/14Restated


Favourable cash balances:

Cash in bank 2 270 541 1 161 912

Closing balance end of year 2 270 541 1 161 912

As required in Treasury Regulation 31.2, National Treasury approved the banks where the NSF bank accounts are held. The weighted average interest rate on short term bank deposits was 6.04% for the 2014/15 financial year (2013/14: 5.32%).

Cash includes cash with commercial banks. Cash equivalents are short-term, highly liquid investments that are held with registered banking institutions with maturities of three months or less and that are subject to an insignificant risk of change in value.

For purposes of the statement of cash flow, cash and cash equivalents comprise cash on hand, deposits held at call with banks, net of bank overdrafts.

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Notes to the Annual Financial Statements10. TRADE AND OTHER PAYABLES FROM NON-EXCHANGE TRANSACTIONS

2014/15 2013/14Restated


Payables to skills development programme and projects 10.1 744 704 745 681

Other accruals 10.2 202 116 -


10.1 Payables to skills development programmes and projects

NSDS II

ABET 1 663 1 663

Critical Skills Support - 4 974 Apprenticeships - 4 974

NSDS III

NSA Ministerial 5 553 2 234 Constituency capacity building 5 029 332

National public dialogue and advocacy 343 424

Skills marketing and communication - 250

Provincial skills development forums 42 36

Capacity building 139 1 192

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Notes to the Annual Financial Statements10. TRADE AND OTHER PAYABLES FROM NON-EXCHANGE TRANSACTIONS (CONTINUED)

10.1 Payables to skills development programmes and projects (continued)

2014/15 2013/14Restated


Government Priorities 465 836 571 161 New growth path 55 080 131 114

Industrial policy action plan 15 007 11 407

Rural development 18 851 24 615

Education and health 2 255 2 045

Justice and crime prevention 7 906 17 165

Co-operatives and small enterprises 10 324 28 997

Public sector capacity 356 413 355 818

Director-General Priorities 171 947 130 304 Worker education 1 720 1 670 Skills system capacity building 8 617 6 236 Training lay-off scheme 551 551 Bursaries - 132 DHET projects for academia, research and development 161 059 121 715

Skills Infrastructure 99 705 35 349 Public delivery infrastructure 97 203 30 237

Community education centres 2 502 5 112


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Notes to the Annual Financial Statements10. TRADE AND OTHER PAYABLES FROM NON-EXCHANGE TRANSACTIONS (CONTINUED)

10.1 Payables to skills development programmes and projects (continued)

As at 31 March 2015, payables to skills development grant projects and programmes amounting to R744.704 million (2013/14: R745.685 million) was recognised. Payables to skills development grant projects and programmes includes accruals that is estimated on an annual basis. For purposes of the estimation of accruals management deems the skills development activities to be rendered equally over the original contract term, while taking into consideration historical trends on each relevant project and programme. These estimates are based on the remaining portion of the contract for a specific year which has not been invoiced/claimed by the skills development providers. The payables recognised for the relevant financial year is deducted from the remaining contractual commitments.

10.2 Other accruals

Other accruals from non-exchange transactions includes the following:

2014/15 2013/14Restated

R’000 R’000

Accrual for overpayment of SETA uncommitted surplus by the Services SETA 185 378 -

Accrual for levy overpayment by the Department of Higher Education and Training 16 738 -

202 116 -

Other payables from other government entities are “ring-fenced” funds which are raised as a consequence of work outstanding per agreements signed with them.

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Notes to the Annual Financial Statements11. TRADE AND OTHER PAYABLES FROM EXCHANGE TRANSACTIONS

2014/15 2013/14

Restated


SARS payable for levy collection costs - 4 034

Administrative payables due to the Department of Higher Education and Training (DHET) 48 688 19 901

Other administrative payables 224 87

Leave and bonus accruals 1 914 1 400


11.1 Leave and bonus accrual

Balance at the beginning of the year 1 400 1 122

Amounts utilised during the year (1 400) (1 122)

Amount recognised during the year 1 914 1 400

Closing carrying amount 1 914 1 400

Leave and bonus accrual composition:

CurrentLeave accrual 1 134 797

Bonus accrual (Thirteenth cheque) 780 603


Leave is calculated based on leave days outstanding at year-end and quantified in terms of total cost of employment per employee. The bonus accrual relates to thirteenth cheque commitments owed to NSF employees at financial year-end.

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Notes to the Annual Financial Statements12. PROVISIONS

2014/15 2013/14Restated


Provision for levies less than threshold 12.1 4 825 3 622

Performance bonus provision 12.2 411 697


12.1 Provision for levies less than threshold

Balance at the beginning of the year 3 622 7 644

Levies less than threshold provision raised/(utilised) for the year 1 203 (4 022)


12.2 Performance bonus provision

Balance at the beginning of the year 697 504

Performance bonus provision unutilised (380) (449)

Performance bonus paid during the year (317) (55)

Performance bonus provision for the year 411 697

Closing balance end of year 411 697

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As at 31 March 2015, the performance bonus provision amounting to R411 million (2013/14: R697 million) was recognised. Performance bonuses accrue to staff on an annual basis subject to the achievement of predetermined performance standards. The provision is an estimate of the amount due to staff in the service of the NSF at the reporting date.


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Notes to the Annual Financial Statements13. SKILLS DEVELOPMENT LEVIES (NON-EXCHANGE REVENUE)

2014/15 2013/14Restated


In terms of the Skills Development Act and the Skills Development Levies Act, the total levy income per the statement of financial performance is as follows:

Percentage of payroll payable as Skills Development Levy 1% 1%

Skills Development Levies received from SARS (20%):

Skills Development Levies received 2 768 542 2 510 885

Skills development levies collected by SARS 13 755 181 12 554 444

Less: Amount withheld by the Department of Higher Education and Training and paid to the SETAs (80%)

(11 004 145) (10 043 559)

Add: Levy overpayment by the Department of Higher Education and Training 16 738 -

Add: SARS levy refund 768 -

Less: Accrual for levy overpayment by the Department of Higher Education and Training

(16 738) -

2 751 804 2 510 885

Movement in provision for levies less than threshold 12.1 (1 203) 4 022

Total 2 750 601 2 514 907

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Notes to the Annual Financial Statements14. INCOME FROM SETAS (NON-EXCHANGE REVENUE)

2014/15 2013/14

Restated


Income from SETAs uncommitted surpluses 14.1 2 586 023 -

Income from SETAs towards TVET college infrastructure development 39 350 1 062 277

Finance income on discounted SETA receivables for TVET colleges 21 055 15 577

infrastructure development

Total 2 646 428 1 077 854

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14.1 Income from SETAs uncommitted surpluses relates to the carry-over of SETA uncommitted accumulated discretionary surplus as at 31 March 2014 in terms of the SETA Grant Regulations section 36 of the Skills Development Act, 1998 (Act No. 97 of 1998).


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Notes to the Annual Financial Statements15. BAD DEBTS RECOVERED

2014/15 2013/14Restated

R’000 R’000

Bad debts recovered 4 194

Total 4 194

16. FINANCE INCOME (EXCHANGE REVENUE)

2014/15 2013/14Restated

R’000 R’000

Finance income from investments at the Public Investment Corporation (PIC) 421 802 354 612

Finance income from other commercial banks 1 190 2 281

Total 422 992 356 893

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Finance income from investments at the Public Investment Corporation (PIC) is disclosed net of realised fair value profits of R6 896 million (2013/14: R80 415 million) relating to financial assets that matured during the current financial year.


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Notes to the Annual Financial Statements17. FINANCE INCOME FROM ADVANCE PAYMENTS TO SKILLS DEVELOPMENT PROJECTS

2014/15 2013/14Restated

R’000 R’000

Finance income from advance payments 58 707 34 171

Total 58 707 34 171

Interest received is from advance payments made by the NSF to skills development providers in terms of the agreed contractual agreements between the parties. In terms of these agreements the interest may be utilised towards the skills development activities as contained in the contract. On contract finalisation, any unutilised funds (in-clusive of accrued interest) should be refunded to the Fund.

18. SKILLS DEVELOPMENT GRANT DISBURSEMENTS

2014/15 2013/14Restated

R’000 R’000

NSA Ministerial 58 524 15 172 National public dialogue and advocacy 491 4 179

Constituency capacity building 26 729 8 432

Skills marketing and communication 255 578

Provincial skills development forums 192 351

Capacity building 30 846 1 632

Skills legislation research and review 11 -

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Notes to the Annual Financial Statements18. SKILLS DEVELOPMENT GRANT DISBURSEMENTS (CONTINUED)

2014/15 2013/14

Restated

R’000 R’000

Government Priorities 1 204 959 1 306 866

New growth path 225 262 428 456





Co-operatives and small enterprises 143 888 107 354

Public sector capacity 525 210 493 123

Director-General Priorities 1 411 903 1 523 696

Worker education 9 932 9 433

Skills system capacity building 29 566 11 888

Training lay-off - 17 091

Academia, research and development 6 366 -

Bursaries 1 074 769 1 272 200

DHET projects for academia, research and development 291 270 213 084

Skills Infrastructure 425 439 144 941

Public delivery infrastructure 407 425 116 837

Community education centres 18 014 28 104

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Notes to the Annual Financial Statements18. SKILLS DEVELOPMENT GRANT DISBURSEMENTS (CONTINUED)

2014/15 2013/14

Restated

R’000 R’000

HRDSSA 7 908 19 833

Research 7 908 19 833

NSDS II - (32 095)

Critical skills support* - (32 095)

Total 3 108 733 2 978 413

* These negative amounts refer to over provisions relating to projects during the previous financial years.

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Notes to the Annual Financial Statements19. EMPLOYEE COSTS

2014/15 2013/14

Restated

R’000 R’000

Salaries and wages 25 527 21 288

Basic salaries 20 505 17 398

Performance awards 31 260

Service bonuses 1 445 1 247

Other non-pensionable allowances 2 914 2 097

Overtime 9 8

Service Benefits 109 -

Net movement: Leave accrual 337 116

Net movement: Service bonus accrual 177 162

Social contributions 3 509 3 019

Provident fund contributions: defined contribution plans 2 648 2 140

Medical aid contributions 857 876

Bargaining council 4 3

Bursaries to employees 193 189

Total 29 229 24 496

Average number of employees 63 57

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Notes to the Annual Financial Statements20. OPERATING EXPENSES

2014/15 2013/14Restated


Advertising and marketing 1,641 -

Bad debts written off - 26

Catering 428 28

Cleaning services 64 -

Computer consumables 43 5

Consultancy and service provider fees 20.1 26 468 4 572

Consumables 370 -

Courier and delivery 1 4

DHET shared services charge 20.2 6 866 6 873

Entertainment 34 10

External auditor's remuneration 3 127 2 816

Internal auditor's remuneration 137 -

Operating leases 186 86

Other (16) 1

Printing and publications 400 102

Repairs and maintenance 6 1

Resettlement cost 692 -

Security 472 -

Software expenses 433 -

Stationery 497 464

Telephone and fax 592 389

Training and development 329 103

Travel and subsistence 5 540 4 252

Venues and facilities 1 447 28

Total 49 757 19 760

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20.1 Consultancy and service provider fees

2014/15

The consulting and service provider fees relates to the service provider to assist with the organisational transformation project for the National Skills Fund (Project Siyaphambili). The service provider will assist NSF to:

i) Improving alignment of the organisation to its mandate;ii) Optimising the NSF’s operations, through the design and implementation of a new operating model, governance model, functional and interaction model, process

model, organisational model and information and technology model;iii) Optimising the NSF’s processes, through business process re-engineering;iv) Building, sourcing and aligning the NSF’s organisation structure that is aligned to the operating model;v) Building, sourcing and improving the NSF’s monitoring and evaluation capability; andvi) Building and improving the NSF’s performance management, information and reporting.

2013/14

The consulting and service provider fees relates to services provider to assist with the execution of the cash to accrual conversion, including the implementation of an accrual accounting system.

20.2 DHET shared service charge

DHET shared service charges relates to a signed service level agreement between the DHET and the NSF, in which the DHET commit to providing the NSF with services such as human resource management, IT management, supply chain management, asset management, legal support and security management in return of a fee paid by the NSF.

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Notes to the Annual Financial Statements21. MANAGEMENT FEES AND BANK CHARGES

2014/15 2013/14Restated


Bank charges paid to banks 29 13

Management fees and expenses paid to Public Investment Corporation (PIC) 5. 2 314 2 078

Total 2 343 2 091

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Notes to the Annual Financial Statements22. CASH GENERATED FROM OPERATIONS

2014/15 2013/14

Restated


Net surplus/(deficit) as per statement of financial performance 2 627 341 910 226

Adjustment for non-cash items:

Amortisation 3. 471 54

Depreciation 2. 2 253 233

Fair value adjustments to investments 5. (6 896) -

Loss on disposal of asset 2. 163 -

Increase/(decrease) in provisions:

Relating to employment 12.2 (286) 471

Relating to impairment 7.2 16 777 (5 180)

Relating to levy provisions 12.1 1 203 (4 022)

Adjustment for items disclosed separately:

Finance income (444 047) (372 470)

2 196 979 529 312

Movements in working capital: 698 947 (1 134 126)

Increase in trade and other receivables 82 815 (568 169)

Decrease in deferred expenditure 389 593 103 027

Increase/(decrease) in trade and other payables 226 539 (668 984)

Cash generated from operations 2 895 926 (604 814)

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Notes to the Annual Financial Statements23. PRIOR PERIOD ERRORS CORRECTED

23.1 Commitments incomplete and inaccurate in the prior period

The following prior period errors occurred with regards to commitments:

1. Reductions in skills development project budgets in the prior year were not taken into consideration in determining the commitment balance at year-end. 2. Deferred expenses, debtors and provisions were incorrectly recognised with regards to projects that have closed or were inaccurately calculated.

The net effect of the above errors resulted in the commitment balance being overstated by R34.369 million. The prior period commitment balance was restated to reflect the correct commitment balance as at the prior period year-end. The prior period error on the statement of financial position, statement of financial performance and statement of cash flow.

23.2 Receivables from skills development programmes and projects inaccurate in the prior year

Trade and other receivables from skills development projects was inaccurately recognised in the 2013/14 financial year resulting in the receivable being overstated by R53 971.31 and the related skills development grant disbursement expenditure being understated by R53 971.31.

23.3 Accrual for skills development grants expenditure inaccurately calculated in the prior year

The payable to skills development programmes and projects was inaccurately calculated in the 2013/14 financial year resulting in trade and other payables from non-exchange transactions and the related skills development grant disbursement expenditure being overstated by R4.410 million.

23.4 Deferred expenditure relating to skills development programmes and projects were inaccurately recognised in the prior year

The deferred expenditure relating to skills development grants expenditure was inaccurately recognised in the 2013/14 financial year resulting in deferred expenditure on skills development grant disbursements being overstated by R2.501 million and the related skills development grant disbursement expenditure being understated by R2.501 million.

23.5 Incorrect classification of expenditure relating to TVET college infrastructure asset

Expenditure relating to the TVET college infrastructure development project amounting to R158.222 million was incorrectly classified as skills development grants disbursements in the 2013/14 financial year, whereas the expenditure should have been capitalised as an asset, while the assets are under construction. This resulted in the skills development grant disbursement expenditure being overstated by R158.222 million and TVET college infrastructure assets being understated by R158.222 million.

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Notes to the Annual Financial Statements23. PRIOR PERIOD ERRORS CORRECTED (CONTINUED)

23.6 Discounting of SETA receivable for TVET college infrastructure development

SETA receivables for TVET college infrastructure development was incorrectly calculated in the 2013/14 financial year as the balance recognised did not take into account the principle of time value of money (financing arrangement). The SETA receivable was recognised at the carrying amount and not at fair value of the receivable to account for the financing element. The error resulted in trade and other receivables from non-exchange transactions and income from SETAs being overstated by R26.954 million.

23.7 Incorrect classification of expenditure for bursaries to employees between operating expenditure and employee costs

Expenditure relating to bursaries to employees amounting to R189 000 in the 2013/14 financial year was incorrectly classified as operating expenditure and not as employee costs. The error resulted in employee cost being understated by R189 000 and operating expenses being overstated by R189 000.

23.8 Incorrect classification between deferred expenditure on skills development grant disbursements, trade and other receivables from non-exchange transactions and provisions

The following classification errors occurred in the prior year:

1. Receivables and deferred expenditure relating to skills development projects amounting to R669.821 million were incorrectly classified between deferred expenditure on skills development grant disbursements and payables to skills development projects in the 2013/14 financial year. The error resulted in trade and other payables from non-exchange transactions and deferred expenditure on skills development grant disbursements being overstated by R669.821 million.

2. Accruals to skills development programmes and projects were incorrectly classified as provision for skills development grant expenditure in the 2013/14 financial year. The error resulted in provisions being overstated by R438.731 million and trade and other payables from non-exchange transactions being understated by R438.731 million.

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2013/14Notes R’000

STATEMENT OF FINANCIAL POSITION

NON CURRENT ASSETS 23.5 159 215As originally stated 990

Prior period correction 158 225

TVET college infrastructure assets 23.5 158 225As originally stated -


Trade and other receivables from non-exchange transactions 23.2 & 23.8 185 528As originally stated -


CURRENT ASSETS 23.2, 23.4 & 23.8 9 211 125As originally stated 9 910 456

Prior period correction (699 331)

Deferred expenditure on skills development grant disbursements 23.4 & 23.8 1 631 675As originally stated 2 303 998


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n Notes to the Annual Financial Statements23. PRIOR PERIOD ERRORS CORRECTED (CONTINUED)

23.9 Impact of prior period correction on the financial statements

The prior year financial statements have been adjusted retrospectively and the effect of the retrospective adjustment on prior year financial statements is as follows:


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nNotes to the Annual Financial Statements23. PRIOR PERIOD ERRORS CORRECTED (CONTINUED)

23.9 Impact of prior period correction on the financial statements (Continued) 2013/14Notes R’000

STATEMENT OF FINANCIAL POSITION (CONTINUED)

Trade and other receivables from non-exchange transactions 23.2 & 23.8 434 168As originally stated 646 705


TOTAL ASSETS 23.2, 23.4, 23.5 & 23.8 9 370 340As originally stated 9 911 446


CURRENT LIABILITIES 23.3 & 23.8 775 426As originally stated 1 449 654


Trade and other payables from non-exchange transactions 23.3 & 23.8 745 685As originally stated 981 182


Provisions 23.8 4 319As originally stated 443 050


TOTAL LIABILITIES 23.3 to 23.8 775 426As originally stated 1 449 654



150

2013/14Notes R’000

STATEMENT OF FINANCIAL POSITION (CONTINUED)

CAPITAL AND RESERVES 23.3 to 23.8 8 594 914As originally stated 8 461 792


TVET college infrastructure development reserve 23.3 to 23.8 2 577 855As originally stated 2 446 587


Accumulated surplus 23.3 to 23.8 6 017 059As originally stated 6 015 205


STATEMENT OF FINANCIAL PERFORMANCE (CONTINUED)

REVENUE 23.6 3 984 020As originally stated 4 010 974


REVENUE FROM NON EXCHANGE TRANSACTIONS 23.6 3 592 956As originally stated 3 619 910


Income from SETAs 23.6 1 077 855As originally stated 1 104 809


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n Notes to the Annual Financial Statements23. PRIOR PERIOD ERRORS CORRECTED (CONTINUED)

23.9 Impact of prior period correction on the financial statements (Continued)


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nNotes to the Annual Financial Statements23. PRIOR PERIOD ERRORS CORRECTED (CONTINUED)

23.9 Impact of prior period correction on the financial statements (Continued)


2013/14Notes R’000

STATEMENT OF FINANCIAL PERFORMANCE (CONTINUED)3 073 795

EXPENSES 23.6 3 233 871As originally stated (160 076)Prior period correction

SKILLS DEVELOPMENT EXPENSES 2 978 415As originally stated 23.2 to 23.5 3 138 491Prior period correction (160 076)

Skills development grant disbursements 2 978 415As originally stated 23.2 to 23.5 3 138 491Prior period correction (160 076)

ADMINISTRATIVE EXPENSES -As originally stated 23.3 & 23.8 -Prior period correction -

Employee costs 24 496As originally stated 23.7 24 307Prior period correction 189

Operating expenses 19 760As originally stated 23.7 19 949Prior period correction (189)

NET SURPLUS FOR THE YEAR 910 225As originally stated 23.2 to 23.7 777 103Prior period correction 133 122

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Notes to the Annual Financial Statements24. COMMITMENTS AND EARMARKED FUNDS

As at year-end the NSF has committed and earmarked its entire reserves and accumulated surplus, excluding the SETA uncommitted surplus reserve, towards skill development programmes and projects. The SETA uncommitted surpluses were transferred to the NSF at year-end (31 March 2015) and hence the surplus funds will be committed during the 2015/16 financial year towards skills development programmes and projects.

The NSF’s mandate is to fund skills development as outlined in the Skills Development Act, 1998 (Act No. 97 of 1998). Hence, the nature of the Fund is developmental and not profit-driven. The Fund’s purpose is not to accumulate large reserves for investment, but utilise its funds towards skills development and thereby contribute towards unlocking the human potential of South Africa’s citizens. Since the dawn of the NSDS III, the National Skills Fund’s performance in skills development grants disbursements has increased consistently and significantly. The National Skills Fund started to utilise both its annual income and accumulated reserves towards funding skills development. The NSF’s improved performance can be clearly noted through its high level of commitments towards skills development.

2014/15 2013/14Restated


Total capital and reserves as at year-end 11 222 255 8 594 914

Commitments and earmarked funds 8 303 631 11 297 956

1. Funds committed contractually at year-end 24.1 & 24.5 6 545 354 7 827 093

2. Funds earmarked towards skills development programmes and projects, that have been approved at year-end, but not yet contracted

24.2 64 061 432 750

3. Funds earmarked towards skills development programmes and projects, that have been recommended for approval at year-end, but have not yet been approved or contracted

24.3 - 764 373

4. Funds earmarked towards constructive commitments arising from annual allocations to ongoing skills development programmes and projects

24.4 1 694 216 2 273 740

UNDER/(OVER)COMMITTED AND EARMARKED 2 918 624 (2 703 042)

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Notes to the Annual Financial Statements24. COMMITMENTS AND EARMARKED FUNDS (CONTINUED)

24.1 Funds committed contractually at year-end

Funds committed contractually are commitments where the NSF has a contractual obligation to fund skills development programmes/projects or administrative projects. With a contractual obligation there is a written agreement with specific terms between the NSF and the third party, whereby the third party undertakes to perform certain deliverables as outlined in the agreement. Performance on these deliverables will obligate the NSF to make payment.

24.2 Funds earmarked towards skills development programmes and projects, that have been approved at year-end, but not yet contracted

Funds earmarked towards skills development programmes/projects, that have been approved at year-end, but not yet contracted are skills development programmes/projects that have been approved by the Director-General of Higher Education and Training as at year-end, but have not yet been contracted as contracting is still in process as at year-end and will be concluded after year-end.

24.3 Funds earmarked towards skills development programmes and projects, that have been recommended for approval at year-end, but have not yet been approved or contracted

Funds earmarked towards skills development programmes and projects, that have been recommended for approval at year-end, but have not been approved and contracted are skills development programmes/projects that have been recommended to the Director-General of Higher Education and Training for approval before year-end for which approval and contracting will take place after year-end.

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Notes to the Annual Financial Statements24. COMMITMENTS AND EARMARKED FUNDS (CONTINUED)

24.4 Funds earmarked towards constructive commitments arising from annual allocations to ongoing skills development programmes and projects

Funds earmarked towards constructive commitments are funds that the NSF commits on an annual basis towards ongoing skills development programmes and projects. Due to this established pattern of past practice the NSF has created a valid expectation on the part of the third parties, that it will continue to fund these skills development programmes and projects on an annual basis. Funds earmarked towards constructive commitment arising from annual allocations to ongoing skills development programmes and projects consist of:

2014/15 2013/14Restated

R’000 R’000

1. Funds earmarked towards bursaries (funded via NSFAS, NRF and others)* 995 633 1 082 514

2. Funds earmarked towards training of workers under the Expanded Public Works Programme* 123 724 240 385

3. Funds earmarked towards training of workers under the DTI Monyetla Programme* 80 133 155 690

4. Funds earmarked towards National Artisan Development* 353 517 520 183

5. Funds earmarked towards supporting the Human Resource Development Council of South Africa* 70 359 137 006

6. Funds earmarked towards supporting the National Skills Authority* 70 850 137 962

Total 1 694 216 2 273 740

* Funds earmarked towards commitments are limited toward the NSDS III strategic period and are expected to increase annually by inflation, currently estimated at 6.06%. Although the commitments above are limited to the NSDS III period, it can be reasonably expected that the commitments may continue past the NSDS III period.

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24.5 Funds committed contractually at year-end

Expenditure contracted for at year-end, which will be financed through the ordinary trading operations, but not recognised in the Annual Financial Statements is as follows:

2014/15 2013/14Objective (2014/15) Restated

R’000 R’000

NSDS III

NSA Ministerial 56 835 38 660Constituency capacity building 7 411 5 411

National public dialogue and advocacy 9 502 4 493

Skills marketing and communication 8 167 4 422

Provincial skills development forums 5 957 1 649

Capacity building 7 624 3 598

Good practice in skills development - 150

Skills legislation research and review 18 174 18 937

Government Priorities 2 604 779 3 423 401New growth path 491 765 488 131





Co-operatives, small enterprises and ngos 153 092 276 192

Public sector capacity 1 136 529 1 666 541

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2014/15 2013/14Restated

R’000 R’000

Director-General Priorities 1 068 202 1 274 329Worker education 12 377 22 310

Skills system capacity building 30 713 60 279

Training lay-off scheme 14 760 14 760

Academia, research and development 32 725 -

Bursaries 559 311 632 394

DHET projects for academia, research and development 418 316 544 586

Skills Infrastructure 2 771 311 3 061 401Public Delivery Infrastructure 2 770 998 3 043 075

Community Education Centres 313 18 326

Human Resource Development Strategy of South Africa (HRDSSA) 21 394 29 302Research 21 394 29 302

Total Skills Development Commitments 6 522 521 7 827 093

Administrative Commitments 22 833 -Organisational Transformation Project (Project Siyaphambili) 22 833 -

Total Commitments 6 545 354 7 827 093

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n Notes to the Annual Financial Statements24. COMMITMENTS AND EARMARKED FUNDS (CONTINUED)

24.5 Funds committed contractually at year-end (continued)


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Carryingamount

Fair value

Financial assets - 2014/15 10 721 698 10 721 698Cash and cash equivalents 2 270 541 2 270 541

Financial assets at fair value through surplus/(deficit) 7 931 051 7 931 051

Trade and other receivables 520 106 520 106

Financial assets - 2013/14 7 393 922 7 393 922Cash and cash equivalents 1 161 912 1 161 912

Financial assets at fair value through surplus/(deficit) 5 797 841 5 797 841

Trade and other receivables 434 169 434 169

Financial liabilities - 2014/15 997 646 997 646Trade and other payables 997 646 997 646

Financial liabilities - 2013/14 771 107 771 107Trade and other payables 771 107 771 107

The fair value of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation.

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nNotes to the Annual Financial Statements25. FINANCIAL INSTRUMENTS - FINANCIAL RISK MANAGEMENT

Exposure to currency, commodity, interest rate and credit risk arise in the normal course of the operations. This note presents information about the exposure to each of the above risks, policies and processes for measuring and managing risk, and the management of capital. Further quantitative disclosures are included throughout these financial statements.

Fair valuesSet out below, is a comparison by class of the carrying amounts and fair value of the financial instruments.


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Notes to the Annual Financial Statements 25. FINANCIAL INSTRUMENTS - FINANCIAL RISK MANAGEMENT (CONTINUED)

The following methods and assumptions were used to estimate the fair values:

Cash and cash equivalentsCash and cash equivalents comprise of cash on hand and are subject to an insignificant risk of changes in value. These are initially and subsequently recorded at fair value. The carrying amount of cash and cash equivalents approximate fair value due to the relative short-term maturity of these financial assets.

Financial assets at fair value through surplus/(deficit)Fair value of financial assets is derived from quoted market prices in active markets, if available.

Trade and other receivableTrade and other receivables are subsequently measured at amortised cost using the effective interest rate method, less any impairment losses. The carrying amount of accounts receivable, net of allowances for bad debt, approximates fair value due to the relative short-term maturity of these financial assets.

Trade and other payableTrade and other payables are stated at amortised cost, which approximates their fair value due to the relatively short-term maturity of these financial liabilities.

Fair value hierarchyThe NSF uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: Quoted (unadjusted) prices in active markets for identical assets and liabilities.Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (ie as price) or indirectly (ie derived from prices).Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

As at 31 March 2015, NSF held the following financial instruments measured at fair value:

2014/15R’000

Total Level 1 Level 2 Level 3

Investments with the Public Investment Corporation (PIC) 7 931 051 7 931 051 - -

7 931 051 7 931 051 - -

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During the reporting period ending 31 March 2015, there were no transfers between level 1 and level 2 fair value measurements.


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As at 31 March 2014 NSF held the following financial instruments measured at fair value:

2013/14R’000

Total Level 1 Level 2 Level 3

Investments with the Public Investment Corporation (PIC) 5 797 841 5 797 841 - -

5 797 841 5 797 841 - -

During the reporting period ending 31 March 2014, there were no transfers between level 1 and level 2 fair value measurements.

CREDIT RISK

Financial assets, which potentially subject NSF to concentrations of credit risk, consist primarily of cash and cash equivalents, investments and accounts receivable. Credit risk arises from the risk that a counter party may default or not meet its obligations timelessly.

NSF management limits its treasury counter-party exposure by only dealing with well-established financial institutions approved by National Treasury through the approval of their investment policy in terms of the Treasury Regulations.

Credit risk with respect to levy paying employers is limited due to the nature of the income received. NSF does not have any material exposure to any individual or counter-party. NSF’s concentration of credit risk is limited to the industry in which the NSF operates. No events occurred in the industry during the financial year that may have an impact on the recovery of trade and other receivables.

Before training advances are paid to service suppliers, provider vetting, as well as site visits, are conducted by the NSF. A list of successful providers are compiled and approved by the Project Grants Committee (PGC) prior to the disbursement of any funds. The risk of non-performance by these counter parties are also mitigated through the application of a reconciliation process which initiates the clearing of an outstanding provider advance before a second advance will be granted.

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The carrying amount of the financial assets represent the maximum credit exposure. The maximum exposure to credit risk as at 31 March 2015:

2014/15R’000

Rated Non-rated Total

Cash and cash equivalents - 2 270 541 2 270 541

Investments 7 931 051 - 7 931 051

Trade and other receivables 520 106 - 520 106

Total 8 451 157 2 270 541 10 721 698

LIQUIDITY RISK

Liquidity risk is the risk of the NSF not being able to meet its obligations as they fall due. The NSF manages the liquidity risk through proper management of working

capital, capital expenditure and actual vs. forecasted cash flows. Adequate reserves and liquid resources are also maintained.

Forecast liquidity reserve as of 31 March 2015 is as follows:

2015/16 R'000

2016/17R'000

2017/18R'000

Opening balance for the period 4 705 664 3 084 752 3 465 775

Operating proceeds 3 239 551 3 465 803 3 614 862

Operating outflow (5 122 721) (3 283 360) (3 472 515)

Cash flow from investments 262 258 198 580 150 363

Closing balance for the period 3 084 752 3 465 775 3 758 485

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The table below analyses the financial liabilities that will be settled on net basis into the relevant maturity groupings based on the remaining period at financial statement date to the contractual maturity date:

2014/15R’000

At 31 March 2015 Less than 1 year Total

Trade and other payables 997 646 997 646

997 646 997 646

2013/14R’000

At 31 March 2014 Less than 1 year Total

Trade and other payables 1 006 604 1 006 604

1 006 604 1 006 604

MARKET RISK

Interest rate sensitivity analysis

Financial assets

NSF is sensitive to the movements in the money market repo rate which is the primary rate to which the investment portfolios are exposed. The rates of sensitivity are based on management’s assessment of possible changes to the interest rates and is formulated on a 100 basis point movement.

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If the weighted average interest rate as at 31 March 2015 had been 100 basis higher or lower the interest income would have been affected as follows:

2014/15R’000

Financial assets - 2014/15

Increase / Decrease in basis point

Effect on the surplus/deficit

Investments - PIC +100 69 962

-100 (69 962)

2013/14R’000

Financial assets - 2013/14

Increase / Decrease in basis point

Effect on the surplus/deficit

Investments - PIC +100 65 918

-100 (65 918)

Foreign exchange riskNSF does not initiate any transactions with international parties and is therefore not exposed to any exchange risk due to currency fluctuations. All transactions are denominated in South African Rand with local vendors.

Price RiskNSF is exposed to equity securities price risk because of investments held and classified as financial assets at fair value through surplus/(deficit) on the statement of financial position. These financial assets are classified as held for trade. NSF is not exposed to commodity price risk.

To manage its price risk arising from equity securities NSF diversifies its portfolio with the Public Investment Corporation (PIC). Diversification of the portfolio is done in accordance with limits set and agreed with PIC.

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Cash flow and fair value interest rate riskAs NSF has significant interest bearing assets, the revenue and operating cash flows are substantially depended on changes in market interest rates. As NSF does not have significant interest bearing liabilities, the expenses and cash flows are not substantially dependent on changes in the market interest rates.

2014/15R’000

Year ended 31 March 2015

Effective interest rate

Subject to interest rate movement:

Floating

Non-interest bearing Total

Current financial assets 6.04% 7 931 051 2 790 632 10 721 683Cash and cash equivalents n/a - 2 270 541 2 270 541

Investments 6.04% 7 931 051 - 7 931 051

Trade and other receivables n/a - 520 091 520 091

Current Liabilities n/a - 997 646 997 646Trade and other payables n/a - 997 646 997 646

2013/14R’000

Year ended 31 March 2014 Effective interest rate

Subject to interest rate movement:

Floating

Non-interest bearing Total

Current financial assets 5.32% 5 797 841 1 596 081 7 393 922Cash and cash equivalents n/a - 1 161 912 1 161 912

Investments 5.32% 5 797 841 - 5 797 841

Trade and other receivables n/a - 434 169 434 169

Current financial liabilities n/a - 771 107 771 107

Trade and other payables n/a - 771 107 771 107

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Notes to the Annual Financial Statements 26. CONTINGENT LIABILITIES

2014/15 2013/14Restated


The following contingent liabilities exist:

Legal claims instituted against the NSF 26.1 1 739 1 739

Application to retain accumulated surplus as at year-end 26.2 11 222 255 8 461 792

Critical skills project expenditure 26.3 1 236 1 236

Total 11 225 230 8 464 767

26.1 Legal claims instituted against the NSF

The legal claims instituted against the National Skills Fund relates to five cases against services providers who rendered skills development training on behalf of the Fund. These claims relates to alleged breach of contract by the NSF. The legal processes is still ongoing to determine the final outcome of the claims.

26.2 Application to retain accumulated surplus as at year-end

The NSF will be applying for the retention of the 31 March 2015 accumulated surplus in terms of section 53(3) of the PFMA from National Treasury during the first quarter of the 2015/16 financial year. The accumulated surplus as at year-end is therefore disclosed as a contingent liability until the approval has been obtained.

26.3 Critical skills project expenditure

The National Skills Fund co-funded a critical skills project with the Energy and Water SETA (EWSETA) for the unemployed to the value of R17 million and there are unclaimed funds by the EWSETA of R1 236 000 (2013/14: R1 236 000). This amount can only be confirmed when all the necessary documentation are provided to the NSF by the EWSETA for verification to validate the expenditure incurred.

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Notes to the Annual Financial Statements 27. CONTINGENT ASSETS

2014/15 2013/14Restated


Legal claims instituted by NSF 27.1 397 663

Uncommitted surplus funds of SETAs to be transferred to the NSF 27.2 - 1 651 120

Total 397 1 651 783

27.1 Legal claims instituted by NSF

The legal claims instituted by the National Skills Fund relates to four cases against services providers who rendered skills development training on behalf of the Fund. These claims relates to service providers failing to deliver the service/training as per contract. The relevant state attorneys have issued summons to the respective service providers. The legal processes is still ongoing to determine the final outcome of the claims.

27.2 Uncommitted surplus funds from SETAs to be transferred to the NSF

On 3 December 2012, the Minister of Higher Education and Training published the new SETA grant regulations in terms section 36 of the Skills Development Act, 1998 (No. 97 of 1998), in Government Gazette No. 35940 to be effective from 1 April 2013. In terms of new SETA grant regulation 3(12), the uncommitted surpluses of the SETAs as at each year-end must be paid over by the SETA to the National Skills Fund by 1 October of each year. However, the SETA is allowed in terms of grant regulation 3(11) to retain a maximum of 5% of the uncommitted surpluses to be carried over to the next financial year. The SETA may also in terms of SETA grant regulation 3(12) submit a business case to the Minister requesting approval to carry over the surpluses where exceptional circumstances have led to projected under-spending. Great uncertainty exists over the a reasonable estimate for the contingent asset to be received from the SETA uncommitted surpluses as at the current year-end, due to reasonably accurate information not being readably available with regards each SETA’s uncommitted surplus. Also, no information is available as to whether the Minister of Higher Education and Training will allow the SETAs to retain their surpluses. The SETAs’ uncommitted surpluses can only be more reasonable estimated once the audit process have been completed for each SETA closer to the end of July of each year and once an indication has been obtained as to whether the Minister of Higher Education and Training will grant the SETAs approval to retain their surpluses. However, due to the fact that the SETAs had to transfer their uncommitted accumulated surplus to the NSF as at 31 March 2015, it is expected that no uncommitted surplus will remain within the SETAs at year-end. Thus, the uncommitted surplus funds to be transferred to the NSF on assumption that the Minister of Higher Education and Training will not approve any SETA business cases to retain their uncommitted surplus, is estimated to be R0.

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Notes to the Annual Financial Statements 28. RELATED PARTY TRANSACTIONS

The National Skills Fund reports to the Minister of Higher Education and Training. Accordingly the NSF transact with a number of related parties within the Department of Higher Education and Training.

All related party transactions that occurred during the current financial year were at arm’s length and in the normal course of business, in accordance with the mandate of the National Skills Fund.

28.1 Relationships

- Department Department of Higher Education and Training (DHET)

- Advisory body within the department National Skills Authority (NSA)

- Entities under the department Qualification Council for Trades and Occupations (QCTO)

South African Qualifications Authority (SAQA)

National Student Financial Aid Scheme (NSFAS)

Agricultural SETA (AGRISETA)

Bank SETA

Culture, Arts, Tourism and Hospitality SETA (CATHSETA)

Construction Education and Training Authority (CETA)

Chemical Industries Education and Training Authority (CHIETA)

Education Training and Development Practices SETA (EDTP SETA)

Energy and Water SETA (EWSETA)

Finance and Accounting Services SETA (FASSET)

Food and Beverages SETA (FOODBEV)

Fibre Processing and Manufacturing SETA (FP&M SETA)

Health and Welfare SETA (HWSETA)

Insurance SETA (INSETA)

Local Government SETA (LGSETA)

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Manufacturing, Engineering and Related Services SETA (MERSETA)

Media, Information and Communication Technologies SETA (MICT SETA)

Mining Qualifications Authority (MQA)

Public Sector SETA (PSETA)

Safety and Security SETA (SASSETA)

Services SETA

Transport Education and Training Authority (TETA)

Wholesale and Retail SETA (W&RSETA)

- TVET Colleges under the department Motheo TVET College Mnambithi TVET College

Vuselela TVET College Thekwini TVET College

Taletso TVET College Mthashana TVET College

Orbit TVET College Nkangala TVET College

South West Gauteng TVET College Gert Sibande TVET College

Ekurhuleni East TVET College Umfolozi TVET College

Ekurhuleni West TVET College Buffalo City TVET College

Sekhukhune TVET College Flavius Mareka TVET College

Vhembe TVET College Letaba TVET College

Mopani South East TVET College King Hintsa TVET College

Waterberg TVET College Tswane North TVET College

Sedibeng TVET College Northern Cape Rural TVET College

Capricorn TVET College Western TVET College

Maluti TVET College Tswane South TVET College

Goldfields TVET College Ikhala TVET College

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28.1 Relationships (continued)


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Boland TVET College Ingwe TVET College

Northlink TVET College Central Johannesburg TVET College

College of Cape Town Lephalale TVET College

False Bay TVET College Northern Cape Urban TVET College

South Cape TVET College East Cape Midlands TVET College

West Coast TVET College Lovedale TVET College

Majuba TVET College Esayidi TVET College

Umgungundlovu TVET College Coastal TVET College

Ehlanzeni TVET College King Sabata Dalindyebo TVET College

Elangeni TVET College Port Elizabeth TVET College

- Members of senior management Executive Officer

Chief Financial Officer

Director Strategic Projects

Director Skills Support Programme

Director Provincial Operations

Director Finance

28.2 Related party transactions and balances - Operating Expenses

2014/15 2013/14Restated

R’000 R’000

DHET - Shared Services 6 867 6 873

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Notes to the Annual Financial Statements 28. RELATED PARTY TRANSACTIONS (CONTINUED)

28.3 Key management personnel

2014/15 2013/14Short term employee benefits Number of

individualsR’000 R’000

Post level 14: Executive Officer 1

Basic salary and social contributions 953 681

Bonuses and performance related payments 70 -

Other short term employee benefits 72 323

Post level 13: Chief Financial Officer 1


Bonuses and performance related payments - -


Post level 13: Director Strategic Projects 1




Post level 13: Director Skills Support Program 1




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2014/15 2013/14

Number of individuals

R’000 R’000

Post level 13: Director Provincial Operations 1




Post level 13: Director Finance 1

Basic salary and social contributions 478 -


Other short term employee benefits 1 -

Total 5 158 4 431

Personnel remuneration is paid by the Department of Higher Education and Training and claimed back as part of the 10% administration fee. No transactions were conducted with any family members of key management personnel during the current or previous period under review.

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28.3 Key management personnel (continued)



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28.4 Related party transactions and balances

2014/15 R’000

Related party

Income from SETAs

uncommittedsurpluses

Income fromSETAs towardsTVET collegeinfrastructure

Financeincome ondiscounted

SETAreceivables

for TVETcolleges

infrastructuredevelopment

Financeincome from

advancepayments to

skillsdevelopmentprogrammesand projects

TVET collegeinfrastructure

assets at 31 March

2015

Skillsdevelopment

grantdisbursement

expense

Payables toskills

developmentprogrammesand projectsbalance at31 March

2015

Otheraccruals

balance at31 March

2015

Deferredexpense

balance at 31 March

2015

SETAreceivables

for TVETcolleges infra-

structuredevelopmentbalance at 31 March

2015

SETA receivables from SETAs

uncommitted surpluses balance at 31 March

2015

Receivablesfrom skills

developmentprogrammesand projectsbalance at 31 March

2015

DHET 316 811 187 626 65 426

HRDCSA 7 908 2 378 3 325

NSA 1 672 525

NSFAS 44 810 911 794 167 319 524 632

SAQA

QCTO 302 302

AGRISETA 25 787 142 18 628 18 628 3 421 25 787

BANK SETA 3 104 30 693

CATHSETA 1 481

CETA

CHIETA 1 865 18 447

ETDP SETA 110 079 1 432 14 156

EWSETA 1 003 9 923

FASSET 78 550

FOODBEV 76 335 1 514 245

FP&M SETA 30 619 1 802

HWSETA 323 742 1 916 192 248

INSETA 92 863


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28.4 Related party transactions and balances (continued)

2014/15 R’000

Related party

Income from SETAs




SETAreceivables

for TVETcolleges


Financeincome from

advancepayments to



assets at 31 March

2015

Skillsdevelopment

grantdisbursement

expense

Payables toskills


2015

Otheraccruals

balance at31 March

2015

Deferredexpense

balance at 31 March

2015

SETAreceivables



2015



2015



2015

LGSETA 267 546 39 350

MERSETA 27 (386) 551 551

MICT SETA 8 570 2 964 38 948 8 570

MQA 3 831 37 883

PSETA 146 14 016 507

SASSETA

SERVICES SETA 1 391 650 185 378

TETA 148 121 113 375

W&R SETA 32 161

Boland TVET College 131 29 177 5 751 5 751

Buffalo City TVET College 88 7 373 1 491 3 430

Capricorn TVET College 196 3 854 1 688 1 688

Central Johannesburg TVET College

2 323 1 021 13 236

Coastal TVET College 43 19 641 7 7

College of Cape Town 412 (203) 2 337 8 843

East Cape Midlands TVET College

10 338 26 466 3 937 9 346


173

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2014/15 R’000

Related party

Income from SETAs




SETAreceivables

for TVETcolleges


Financeincome from

advancepayments to



assets at 31 March

2015

Skillsdevelopment

grantdisbursement

expense

Payables toskills


2015

Otheraccruals

balance at31 March

2015

Deferredexpense

balance at 31 March

2015

SETAreceivables



2015



2015



2015

Ekurhuleni East TVET College

27 018

Ekurhuleni West TVET College

691 46 731 4 398 4 398

Elangeni TVET College 226 4 707 2 083 6 890

Ehlanzeni TVET College 3 669 3 669

Esayidi TVET College 10 378 43 437 3 241 3 241

False Bay TVET College 84 13 347 4 333 7 319

Flavius Mareka TVET College

Gert Sibande TVET College

38 10 513 11 890 4 947 11 098

Goldfields TVET College 1 222 1 222

Ikhala TVET College 66 20 703 2 432 743 4 663

Ingwe TVET College 16 10 338 1 617 1 649 1 649

King Hintsa TVET College 22 243 516 15 255

King Sabata Dalindyebo TVET College

5 614 660 660

Lephalale TVET College 157 18 752 2 346

Letaba TVET College 63 10 362 754 1 666 12 385



Part E

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2014/15 R’000

Related party

Income from SETAs




SETAreceivables

for TVETcolleges


Financeincome from

advancepayments to



assets at 31 March

2015

Skillsdevelopment

grantdisbursement

expense

Payables toskills


2015

Otheraccruals

balance at31 March

2015

Deferredexpense

balance at 31 March

2015

SETAreceivables



2015



2015



2015

Lovedale TVET College 804 361 361

Majuba TVET College 7 436 7 906 7 906

Maluti TVET College 17 309

Mnambithi TVET College 302 1 991 2 684 16 542

Mopani South East TVET College

45 17 609 815 815

Motheo TVET College 29 574 29 574

Mthashana TVET College 3 31 058 10 532 3 933 3 933

Nkangala TVET College 53 (2 014) 1 556

Northlink TVET College 35 8 108 59

Northern Cape Rural TVET College

159 22 491 2 784 2 784

Northern Cape Urban TVET College

8 2 419 599 599

Orbit TVET College 17 778 5 575 7 931

Port Elizabeth TVET College

1 (333) 333

Sedibeng TVET College 10 10 668 6 664 10

Sekhukhune TVET College 55 19 992 671



Part E

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2014/15 R’000

Related party

Income from SETAs




SETAreceivables

for TVETcolleges


Financeincome from

advancepayments to



assets at 31 March

2015

Skillsdevelopment

grantdisbursement

expense

Payables toskills


2015

Otheraccruals

balance at31 March

2015

Deferredexpense

balance at 31 March

2015

SETAreceivables



2015



2015



2015

South Cape TVET College 127 42 879 5 275 8 487

South West Gauteng TVET College

322 8 181 846 7 267

Taletso TVET College 703 2 201 3 063

Thekwini TVET College 36 324 831 831

Tshwane North TVET College

14 232 581 20 860

Tshwane SouthTVET College

18 8 350 1 231 1 773

Umfolozi TVET College 34 59 510 38 995 18 251 18 251

Umgungundlovu TVET College

37 20 676 2 578 2 560 3 509

Vhembe TVET College 28 4 132 2 246 2 246

Vuselela TVET College 5 559 969

Waterberg TVET College 123 65 761 2 767 1 929 1 929

West Coast TVET College 357 24 054 3 850 3 850

Western TVET College 1 11 466 1 062 4 557

TOTAL 2 586 023 39 350 21 054 48 991 249 637 1 796 619 528 117 250 804 809 960 150 050 339 980 4 121


176

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Related party



SETAreceivables

for TVETcolleges


Financeincome from

advancepayments to



assets at 31 March

2014

Skillsdevelopment

grantdisbursement

expense

Payables toskills


2014

Otheraccruals

balance at31 March

2014

Deferredexpense

balance at 31 March

2014

SETAreceivables



2014



2014

DHET 213 213 121 843 19 901 64 852

NSA 10 994 1 903

NSFAS 17 156 1 059 120 143 601 596 381

SAQA 204 37 064

QCTO 280 280 280

AGRISETA 23 807 895 13 328 10 900 3 421

BANK SETA 65 046 2 447 67 493

CATHSETA 22 226 836 23 062

CETA 49 696

CHIETA 39 094 1 470 40 565

ETDP SETA 30 000 1 128 (54) 31 129

EWSETA 21 029 791 21 820

FASSET 39 272

FOODBEV 22 719 855 23 574 245

FP&M SETA 27 049 1 017 6 688 28 066


177

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Related party



SETAreceivables

for TVETcolleges


Financeincome from

advancepayments to



assets at 31 March

2014

Skillsdevelopment

grantdisbursement

expense

Payables toskills

developmentprogramme-sand projects

balance at31 March

2014

Otheraccruals

balance at31 March

2014

Deferredexpense

balance at 31 March

2014

SETAreceivables



2014



2014

HWSETA 28 751 1 081 29 832

INSETA 33 924

LGSETA 41 517 10 403 41 517

MERSETA 114 530 600 (432) 551 1 543

MICT SETA 54 145 2 036 (1) 56 181

MQA 80 285 3 020 83 305 3 326

PSETA 355 8 107 1 969 5 204 28 216

SASSETA 21 724

Services SETA 162 786 (32 095) 4 974

TETA 55 831 55 831

W&RSETA 128 847 50 000

Boland TVET College 133 28 067 8 539 8 539

Buffalo City TVET College 117 3 124 978 4 164

Capricorn TVET College 394 29 710 1 638 1 638

Central Johannesburg TVET College 45 (6 776) 698 13 233


Part E

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Related party



SETAreceivables

for TVETcolleges


Financeincome from

advancepayments to



assets at 31 March

2014

Skillsdevelopment

grantdisbursement

expense

Payables toskills


2014

Otheraccruals

balance at31 March

2014

Deferredexpense

balance at 31 March

2014

SETAreceivables



2014



2014

Coastal KZN TVET College 651 22 359 8 313 8 313

College of Cape Town 219 24 170 3 833 7 424

East Cape Midlands TVET College 378 9 870 6 707 11 997 24 919

Ekurhuleni East TVET College 4 (6 325) 21 14 072

Ekurhuleni West TVET College 616 (10 151) 4 387 29 198

Elangeni TVET College 439 16 717 6 254 6 254

Ehlanzeni TVET College 3 669 3 669

Esayidi TVET College 9 909 (12 480) 4 24 649

False Bay TVET College 42 18 678 5 443 10 514 374

Flavius Mareka TVET College 11 462

Gert Sibande TVET College 10 044 20 321 4 796 4 796

Goldfields TVET College 11 636 1 222 1 222

Ikhala TVET College 43 19 766 2 108 839 1 086

Ingwe TVET College 69 9 870 3 975 33 33

Part E

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Related party



SETAreceivables

for TVETcolleges


Financeincome from

advancepayments to



assets at 31 March

2014

Skillsdevelopment

grantdisbursement

expense

Payables toskills


2014

Otheraccruals

balance at31 March

2014

Deferredexpense

balance at 31 March

2014

SETAreceivables



2014



2014

King Hintsa TVET College 21 (4 625) 273 15 230

King Sabata Dalindyebo TVET College 29 3 179 642 642

Lephalale TVET College 145 (3 080) 653 3 878

Letaba TVET College 163 9 893 (5 327) 912 12 323

Lovedale TVET College 3 018 431 431

Majuba TVET college 2 26 251 9 393 9 393

Maluti TVET College (6 009) 17 309

Mnambithi TVET College 158 (8 161) 693 16 240

Mopani South East TVET College 11 18 428 5 471 5 471

Motheo TVET College 17 869 29 574 29 574

Mthashana TVET College 1 29 653 18 747 2 250 2 250

Nkangala TVET College 50 1 526 1 529 1 529

Northlink TVET College 67 48 686 7 797 11 923

Northern Cape Rural TVET College 504 20 565 13 737 17 915

Part E

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Related party



SETAreceivables

for TVETcolleges


Financeincome from

advancepayments to



assets at 31 March

2014

Skillsdevelopment

grantdisbursement

expense

Payables toskills


2014

Otheraccruals

balance at31 March

2014

Deferredexpense

balance at 31 March

2014

SETAreceivables



2014



2014

Northern Cape Urban TVET College 5 18 916 988 988

Orbit TVET College (10 109) 1 12 204

Port Elizabeth TVET College 1 10 616 1 1

Sedibeng TVET College 121 (3 883) 544 4 548

Sekhukhune TVET College 185 (949) 3 419 8 930

South Cape TVET College 35 9 793 4 264 8 076

South West Gauteng TVET College 410 (9 239) 1 843 16 122

Taletso TVET College 154 1 498 3 063

Thekwini TVET College 448 11 720 735 735

Tshwane North TVET College 19 (20 478) 348 20 846

Tshwane South TVET College 22 4 987 736 3 592

Umfolozi TVET College 4 29 610 67 134 20 963 20 963

Umgungundlovu TVET College 83 19 740 21 038 2 498 2 498

Vhembe TVET College 43 45 323 2 230 2 230

Part E

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Related party



SETAreceivables

for TVETcolleges


Financeincome from

advancepayments to



assets at 31 March

2014

Skillsdevelopment

grantdisbursement

expense

Payables toskills


2014

Otheraccruals

balance at31 March

2014

Deferredexpense

balance at 31 March

2014

SETAreceivables



2014



2014

Vuselela TVET College 16 400 410 5 000

Waterberg TVET College 122 9 870 7 732 2 269 4 913

West Coast TVET College 105 16 141 5 855 11 867

Western TVET College 1 (8 227) 6 14 966

TOTAL 1 062 278 15 576 24 220 158 225 1 798 053 459 748 19 901 1 116 090 563 275 37 125


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Notes to the Annual Financial Statements 29. DEFINED CONTRIBUTION PLAN

The NSF provides for retirement benefits for all its permanent employees through a defined contribution scheme to the GEPF that is subject to the Pension Funds Act, 1956 (Act No. 24 of 1956) as amended. In terms of the Pension Funds Act, 1956 (Act No. 24 of 1956), the fund is not required to be actuarially valued.

The NSF’s liability is limited to its considerations made.

2014/15 2013/14


Contributions for the year included in employee cost 19. 2 648 2 140

30. OPERATING LEASE RENTAL

2014/15 2013/14R’000 R’000

NSF as lessee

Future lease payments under non-cancellable operating leases:

Photocopy machines 355 707 88 687

Due within one year 138 431 34 343

Due within two to five years 217 276 54 344

Later than five years - -

Parking 45 -

Due within one year 45 -

Total 355 752 88 687

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Notes to the Annual Financial Statements 30. OPERATING LEASE RENTAL (CONTINUED)

Minimum lease payments for photo copy machines recognised as an expense during the period amount to R138 431 (2013/14: R79 273). Leased machinery are contracted for the remaining periods of one and four years, with renewal options available in certain instances.

Minimum lease payments for parking recognised as an expense during the period amount to R45 000 (2013/14: R0).

31. EVENTS AFTER REPORTING PERIOD

There are no material adjusting events after the reporting date.

32. NOTES TO THE STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS

32.1 Revenue from non-exchange transactions

The actual revenue received from non-exchange transactions exceeded the budgeted revenue by 74.7%. The increase can be attributed to the income received from the SETAs due to uncommitted surplus funds that was paid over to the NSF on 31 March 2015.

32.2 Revenue from exchange transactions

The actual revenue received from exchange transactions is 36.3% above the budget. This is due an increase in the NSF’s investments as a result of additional income received from the SETAs towards the TVET college infrastructure development.

32.3 Skills development grant disbursements

The actual skills development grant disbursements was 51% below budget, which can mainly be attributed to the following:1. Delays in the appointment of construction companies to start construction on the new TVET college campuses resulted in funds not being disbursed in the current

financial year, which will be rolled over to the next financial year; and2. There has been generally slow progress on the implementation of skills development projects with the various TVET colleges, resulting in funds not being

disbursed in the current financial year, which will be rolled over to the next financial year.

32.4 Employee cost

The actual employee costs are 46.5% below the budgeted employee costs. This is mainly due to the delay in implementing the NSF’s improved organisational structure.

Notes to the Annual Financial Statements32. NOTES TO THE STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS (CONTINUED)

32.4 Employee cost (continued)

The delay was deemed necessary as a result of the listing of the National Skills Fund as a schedule 3A public entity and to allow for the development of an effective and efficient operating model for the NSF on which the organisational structure will be based. It is expected that the additional posts will be filled within the next two years as part of the NSF’s organisational transformation project (Project Siyaphambili).

32.5 Operating Expenses

The actual operating expenses are 33.3% below the budgeted operating expenses. This saving is driven by the lower than budgeted employee costs mainly due to the delay in implementing the NSF’s improved organisational structure. The delay was deemed necessary as a result of the listing of the National Skills Fund as a schedule 3A public entity. It is expected that the additional posts will be filled within the next two years as part of the NSF’s organisational transformation project (Project Siyaphambili).

32.6 Management fees and bank charges

Management fees and bank charges are in line with budget expectations.

32.7 Collection cost to SARS

There was a saving of R58.462 million on the actual SARS collection costs for the year in comparison to the costs budgeted for the year. SARS is allowed to charge up to 2% as collection costs but have historically only charged 1%, which is the amount budgeted for. SARS invoices the NSF on a monthly basis for the actual costs incurred to collect skills development levies, which were about 0.4%.

32.8 Capital Expenditure

The actual capital expenditure is below budget as the capital expenditure projects (accounting system, payroll system, human resource system, supply chain system, performance information and management system, project monitoring system etc) are still in the planning and design phase, and is due for roll out and implementation within the next two financial years with the implementation of the efficiency and effectiveness improvement initiative. The NSF has however relocated to a new office building where a significant investment was made in new furniture and IT equipment.

Part E

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Notes to the Annual Financial Statements33. IRREGULAR EXPENDITURE

2014/15 2013/14Notes R’000 R’000

Reconciliation of irregular expenditure:

Opening balance - previous year - -

Add: Irregular expenditure - current year 28 496 -

Less: Amounts condoned - -

Less: Amounts not recoverable (not condoned) - -

Irregular expenditure awaiting condonation 28 496 -

Analysis of irregular expenditure per age classification:

Current year 28 496 -

Prior years - -

Total 28 496 -

Part E

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Part E

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Notes to the Annual Financial Statements33. IRREGULAR EXPENDITURE (CONTINUED)

Details of irregular expenditure:

Disciplinarysteps taken

Number of cases

2014/15R’000

2013/14R’000

Non-compliance to requirements of supply chain management N/A 2

Opening balance - prior year - -

Add: Irregular expenditure 2013/14 - -

Less: Irregular expenditure condoned 2013/14 - -

Add: Irregular expenditure 2014/15 28 496 -

Less: Irregular expenditure condoned 2014/15 - -

Total 28 496 -

Appointment of TVET college construction contractors:

TVET college infrastructure development is centrally managed by the Department of Higher Education and Training, and financed through the National Skills Fund in terms of the MoA between the Department of Higher Education and Training and the National Skills Fund. Hence, the following is managed centrally by the Department of Higher Education and Training:

1. All procurement of TVET college infrastructure development, which includes the award of tenders to the principal agent and construction contractors; and2. Implementation oversight of TVET college infrastructure development.

The current year irregular expenditure of R28.496 million (2013/14: R0 million) is the result of expenditure incurred relating to bids that were awarded in contravention of Construction Industry Development Board (CIDB) regulations.

CIDB regulation 17 stipulates that a contractor’s grading for general building works (GB), should be in line with the value of the contract. Potentially emerging contractor (PE) may be at a grade lower than the required grade. In the terms of reference of the tenders awarded, the requirements stipulated a CIDB grading of 7 GB PE which is an indication that the project value could be for project values up to R130 million. The two tender awards for tender DHET041 were for contracts valued at between R167 million and R194 million.

Part E

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nNotes to the Annual Financial Statements33. IRREGULAR EXPENDITURE (CONTINUED)


CIDB regulation 25 (7A) does allow the award of tenders outside the tender value range; however, certain provisions are stipulated, amongst other, namely:- The margin of the tender exceeding the tender value range should be reasonable (according to regulation 25(3) the limit is 20%);- The award does not pose undue risk (in other words experience/work capacity and financial capability were evaluated); and- In terms of CIDB regulation 21(3), the Department should report to the CIDB the nature of the financial or management support and the benefit derived from such

support in the development of that contractor.

Two of the tenders awarded to contractors exceeded the allowable margin of the tender according to CIDB regulation 25(3) and posed undue risks as these contractors were considered not to have the financial and work capability to successfully complete the projects.

The appointment of the above contractors were done by the Department of Higher Education and Training after the construction tender was re-advertised for the second time. The first tender was cancelled due to the department not receiving any proposals that met the necessary criteria. After the re-advertisement a significant lower number of proposals were received. The loss of time due to a second advertisement led to the department awarding bids to construction contractors for three out of the sixteen construction sites.

Condonement of irregular expenditure:

Condonement of the irregular appointment of the construction contractors and related irregular expenditure will be sought from the Director-General of Higher Education and Training as the Accounting Authority of the NSF.

Success Story

BENEFICIARIES SHOW GRATITUDE FOR LIFE CHANGING BURSARIES

The Department of Higher Education and Training (DHET), through the National Skills Fund (NSF), has distributed billions of rands for bursaries to assist academically deserving students of South Africa.

Since 2008 to the current financial year-end, the NSF has contributed R4.816 billion towards bursaries.

In 2014/15 alone, NSF has funded R1.05 billion towards bursaries benefitting 15 216 students. These students, who hail from different walks of life, universities and fields of study, tell inspiring accounts of how bursaries have changed their lives.

Mabulana Tebogo Collen, a 23 year old civil engineering graduate from the University of Limpopo writes of his misfortunes growing up in a poor household run by a single uneducated and unemployed mother.

“The bursary from the National Skills Fund has made history for me. I am the first and only to graduate from my family and I will forever be indebted to NSF for investing in me until my postgraduate qualification. Without their help I received from them, I don’t know where I would be today,” shared Tebogo.

What seems evident and runs across the testimonies is the positive impact the bursaries have had in ensuring that young dreams became reality.

Sharing the same sentiments is Sinovuyo Rodolo, born and raised in Mthatha in the Eastern Cape. NSF made it possible for her to study and afford costs of the university of her dreams in Cape Town.

”Coming from a rural village with literally nothing around to inspire you, I always wanted to run away to a beautiful city and Cape Town for me was the ultimate place because I had once seen it in a torn magazine and it looked like paradise. Not only did the bursary help me financially but it placed me at a place I dreamed of since I was a little girl,” wrote Rodolo.

Currently she works at Unilever as an Assistant Brand Manager.

“I now earn a decent living and I am able to take care of myself, my family and even neighbours from time to time. To come from a poor background like mine and to be where I am today is somewhat a miracle,” added Rodolo in her letter of gratitude.

Students shared similar stories, stories of hope changing their circumstances of despair that is beyond their control to circumstances with unlimited opportunities.

Suc

cess

Sto

ry


5. ANNEXURE: LIST OF SKILLS DEVELOPMENT PROGRAMMES AND PROJECTS FUNDED BY NSF

Part E

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NSF Reference Number

Project Name Short Description Project Start Date Project End Date Contract Value(Project Budget)

2014/15Skills Development

Grant Disbursement Expenditure

Total Skills Development

Grant Disbursement Expenditure to

Date

Remaining Commitment(Remaining

Budget)

R’000 R’000 R’000 R’000

NSA MINISTERIAL PRIORITIES 139 762 58 524 82 927 56 835

Constituency Capacity Building 45 575 26 729 38 164 7 411

NSF/10/2/1/1 South African National Civic Organisation (SANCO 1)

Capacity development of members.

20-Apr-2012 31-Mar-2013 2 000 405 2 000 -

NSF/10/2/1/11 South African National Civic Organisation (SANCO 2)


1-Apr-2014 31-Mar-2017 4 400 2 805 2 805 1 595

NSF/10/2/1/10 South African College Principle's Organisation (SACPO 1)


20-Sep-2012 31-Dec-2013 1 969 1 235 1 969 -

NSF/10/2/1/18 South African College Principle's Organisation (SACPO 2)


1-Apr-2014 31-Mar-2017 2 613 2 080 2 081 532

NSF/10/2/1/2 Womens National Coalition (WNC 1)


1-Jan-2012 31-Aug-2012 1 999 401 1 999 -

NSF/10/2/1/12 Womens National Coalition (WNC 2)


1-Apr-2014 31-Mar-2017 4 400 4 388 4 388 12

NSF/10/2/1/13 Association of Private Providers of Education, Training and Development (APPETD 2)


1-Apr-2014 31-Mar-2017 1 375 1 021 1 021 354

NSF/10/2/1/4 National Council of Trade Unions (NACTU 1)


26-Apr-2012 30-Jun-2013 1 399 82 1 399 -

NSF/10/2/1/14 National Council of Trade Unions (NACTU 2)


1-Apr-2014 31-Mar-2017 1 760 1 509 1 509 251

NSF/10/2/1/15 Department of Public Service and Administration (DPSA 2)


1-Apr-2014 31-Mar-2017 3 985 3 985 3 985 -

NSF/10/2/1/16 Federation of Unions of SA (FEDUSA 2)


1-Apr-2014 31-Mar-2017 1 210 912 912 298

NSF/10/2/1/17 Higher Education South Africa (HESA 2)


1-Apr-2014 31-Mar-2017 798 7 7 791







Date


Budget)

R’000 R’000 R’000 R’000

NSF/10/2/1/8 South Africa Youth Council (SAYC 1)


1-Apr-2012 30-Jun-2013 4 997 472 4 997 -

NSF/10/2/1/19 South Africa Youth Council (SAYC 2)


1-Apr-2014 31-Mar-2017 5 500 4 400 4 400 1 100

NSF/10/2/1/5 Congress of South African Trade Unions (COSATU 1)


1-Apr-2012 30-Jun-2013 2 891 1 226 2 891 -

NSF/10/2/1/20 Congress of South African Trade Unions (COSATU 2)


1-Jul-2013 31-Mar-2017 4 279 1 801 1 801 2 478

National Public Dialogue and Advocacy 20 400 491 10 898 9 502

NSF/10/2/2/1 National Skills Conference Advocacy campaign on skills development.

1-Apr-2013 31-Mar-2015 8 500 217 6 469 2 031

NSF/10/2/2/2 NSA Provincial Mobilisation and Consultation Workshop

Dialogue and advocacy workshops.

1-Sep-2012 31-Mar-2015 5 400 234 4 389 1 011

NSF/10/2/2/3 NSA Advocacy Campaign Advocacy campaign. 15-Nov-2012 31-Mar-2015 6 500 40 40 6 460

Skills Marketing and Communication 9 000 255 833 8 167

NSF/10/2/3/1 Skills Marketing and Communi-cations

Skills marketing and communications.

5-Nov-2012 31-Mar-2015 9 000 255 833 8 167

Provincial Skills Development Forums 6 500 192 543 5 957

NSF/10/2/4/1 Provincial Skills Development Forums

NSA Provincial Skills Development Forums.

1-Apr-2013 31-Mar-2015 6 500 192 543 5 957

5. ANNEXURE: LIST OF SKILLS DEVELOPMENT PROGRAMMES AND PROJECTS FUNDED BY NSF (CONTINUED)Pa

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Date


Budget)

R’000 R’000 R’000 R’000

Capacity Building 40 102 30 846 32 478 7 624

NSF/10/2/5/1 NSA Members Capacity Building

Capacity development of NSA members.

18-Sep-2012 31-Mar-2016 1 450 -54 672 778

NSF/10/2/5/2 NSA Personnel (Deputy Direc-tor's contract posts)

Deputy Director contract posts.

1-Jan-2013 31-Aug-2014 4 230 355 1 100 3 130

NSF/10/2/5/3 NSA Capacity Building: ILO Project

ILO: Workshops, seminars, mentoring, presentations, international visits.

20-Jan-2013 31-Mar-2015 4 300 423 584 3 716

NSF/10/2/5/4 NSA Fund Manager (SAB&T) NSA objectives funded via NSA Fund Manager.

18-Nov-2014 18-Nov-2017 30 122 30 122 30 122 -

Skills Legislation Research and Review 18 185 11 11 18 174

NSF/10/2/7/1 Skills Legislation Research and Review

Skills legislation research and review.

1-Apr-2013 31-Mar-2015 18 185 11 11 18 174

GOVERNMENT PRIORITIES 6 100 051 1 204 959 3 495 272 2 604 779

New Growth Path 1 463 624 225 262 971 859 491 765

NSF/10/3/1/1 AgriSETA and Commissioner for Land Rights Restitution

Skills development linked to land restitution (farm management, technical skills, governance and leadership, etc.)

31-Jul-2014 31-Dec-2016 44 550 18 628 39 864 4 686

NSF/10/3/1/10 Lepelle Northern Water Develop scarce skills in the warter sector in Limpopo (Certificates in water & waste treatment reticulation, plumbing, electrical, mechanical, internship programme)

29-Aug-2011 30-Jun-2014 63 920 224 53 272 10 648

5. ANNEXURE: LIST OF SKILLS DEVELOPMENT PROGRAMMES AND PROJECTS FUNDED BY NSF (CONTINUED)

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R’000 R’000 R’000 R’000

NSF/10/3/1/11 Office of the Premier KZN Intergrated training in agriculture, tourism, artisan trades, engineering and EPWP. Proposed interventions are learnerships, apprenticeships, bursaries, internships & skills programmes.

19-Aug-2011 31-May-2015 45 793 7 578 29 211 16 582

NSF/10/3/1/13 Gert Sibande TVET College Address water, waste and reticulation challenges at municipalities and commu-nities in Limpopo (Learn-erships, artisan develop-ment, skills programmes). Auxiliary Nursing - 12 learners

23-Aug-2011 31-Dec-2015 18 057 10 13 251 4 806

NSF/10/3/1/14 Proserve South Africa Training in the tourism nodes identified in the Global Competiveness Project by Department of Tourism.

5-Aug-2011 30-Jun-2013 18 977 586 18 977 -

NSF/10/3/1/15 Department of Public Works (DPW Learnerships and Arti-sans)

Learnerships and artisan development.

1-Apr-2011 31-Mar-2016 52 500 9 660 9 659 42 841

NSF/10/3/1/16 Department of Public works (Northern Cape artisan devel-opment)

Artisan development. 1-Apr-2011 31-Mar-2016 7 100 -5 487 1 491 5 609

NSF/10/3/1/17 Mahube Training and Devel-opment

Occupationally-directed programmes, workplace-based skills development and increasing public sector capacity.

2-Apr-2012 1-Apr-2014 74 880 515 74 864 16







Date


Budget)

R’000 R’000 R’000 R’000

NSF/10/3/1/18 Sizimisele Sesto JV Apprenticeships, learnerships, training of PWD.

2-Apr-2012 31-Mar-2015 42 803 18 012 38 155 4 648

NSF/10/3/1/19 Epilepsy South Africa - Western Cape

People with disabilities - Learnerships & skills programmes

29-Jun-2012 31-Dec-2015 23 000 2 826 16 815 6 185

NSF/10/3/1/20 Eskilz Training Co-operative Skills programmes 1-Aug-2012 31-Dec-2014 11 970 1 092 11 946 24

NSF/10/3/1/21 Izizwe Training Centre t/a Simtech training and develop-ment

Artisan development 1-Aug-2012 31-Dec-2014 19 928 3 810 17 835 2 093

NSF/10/3/1/22 Africa Skills Village (Training and Management Services) Pty Ltd

Learnerships and artisan development.

1-Aug-2012 31-Dec-2015 47 813 13 677 34 192 13 621

NSF/10/3/1/23 Ada Holdings (Previously Cann-istraro Investments)

Artisan development and improve employability (computer literacy, drivers licence, New Venture Creation programme)

20-Aug-2012 31-Dec-2018 65 585 16 025 58 450 7 135

NSF/10/3/1/24 Kgabo Cars Training Centre Artisan development - Automotive Repairs & Maintenance Level 4 and do trade test.

23-Aug-2012 31-Aug-2013 1 715 1 1 367 348

NSF/10/3/1/25 Maredi Telecoms and Broad-casting (Pty) Ltd

Internship programme - 18 months

1-Apr-2014 31-Dec-2014 5 581 1 460 5 581 -

NSF/10/3/1/26 South African Maritime Safety Authority (SAMSA)

Maritime engineering skills programmes.

21-Aug-2012 31-Dec-2015 93 610 13 623 79 738 13 872


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R’000 R’000 R’000 R’000

NSF/10/3/1/28 Vukani Aviation CC National aviation cadet programme.

8-Jan-2013 31-Dec-2015 77 071 17 214 68 184 8 887

NSF/10/3/1/30 Transnet Rail Engineering Infrastructure support and training of 1000 artisans.

1-Aug-2012 31-Dec-2018 175 114 57 110 109 269 65 845

NSF/10/3/1/31 MERSETA Artisan development programme.

1-Jan-2009 31-Dec-2013 125 926 -386 125 926 -

NSF/10/3/1/34 Bigen Africa Services Water and waste reticulation Level 4;Plumbing Level 4,Supervision: Water and waste reticulation operations level 4,Water and waste treatment operations level 4,Water purification processes level 4,Water and waste water treatment - Process control supervision level 4, Interns on BSC: Hydrology, water and sanitation chemistry, Experiental training: ND engineering civil; ND engineering mechanical; ND engineering electrical.

29-Oct-2013 31-Dec-2015 46 985 20 668 30 519 16 466

NSF/10/3/1/36 Denel SOC Ltd Artisan development. 8-Jul-2014 31-Mar-2017 42 561 5 135 5 136 37 425


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R’000 R’000 R’000 R’000

NSF/10/3/1/5 PSETA Training in learnership, skills programme, artisans, co-operative and capacity building.

10-Aug-2011 31-Dec-2015 64 428 14 016 35 462 28 966

NSF/10/3/1/6 Deloitte Ukhubhaba Consortium (Aviation SP)

Aviation project(Training of flight pilots; NCV training; Technical training)

28-Oct-2010 31-May-2014 79 079 8 608 79 079 -

NSF/10/3/1/8 False Bay TVET College Various NQF3-5 certificate courses.

10-Aug-2011 31-Dec-2014 17 131 657 13 616 3 515

NSF/10/3/1/37 Eskom Artisan Development Support

Artisan development. 6-Feb-2015 31-Dec-2018 173 750 - - 173 750

NSF/10/3/1 South African Airways Technical Artisan development. 30-Mar-2015 31-Dec-2018 23 797 - - 23 797

Industrial Policy Action Plan 403 890 58 653 168 060 235 830

NSF/10/3/2/1 Monyetla Work Readiness Programme

Call centre agents (work readiness programme).

27-Jan-2012 31-Mar-2016 60 446 -273 60 446 -

NSF/10/3/2/5 DTI Tooling Initiative Programme Artisan development in Tool, Die and Mould making.

22-Sep-2012 31-Dec-2016 200 335 58 157 102 627 97 708

NSF/10/3/2/6 DTI Unemployed Graduate programme (Itukise Work Expe-rience project)

Placement of unemployed graduates to gain work-place experience.

1-Jan-2013 31-Mar-2016 71 865 769 4 987 66 878

NSF/10/3/2/7 DTI Monyetla Work Readiness Programme 4

Call centre agents (work readiness programme) - BPS sector.

24-May-2013 31-Dec-2016 71 244 - - 71 244


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R’000 R’000 R’000 R’000

Rural Development 950 047 221 235 458 908 491 139

NSF/10/3/3/1 Department of Rural Devel-opment and Land Reform (NARYSEC)

Youth development programme: Trained as para-professionals in the rural areas (Learnerships, artisan related programmes, skills programmes, etc., and ractical work experience.

18-Apr-2012 31-Mar-2016 191 024 14 794 44 557 146 467

NSF/10/3/3/10 Therapeuo Training Beauty therapists. 11-Mar-2014 31-Dec-2016 313 215 215 98

NSF/10/3/3/11 Earth Child Consulting Skills programmes in bricklaying, plastering, electrical engineering, painting, plumbing, plant production, animal production, hospitality and tourism, fast food service, accomodation, tour guide and assistant housekeeping.

2-Apr-2014 31-Mar-2016 62 779 27 375 27 375 35 404

NSF/10/3/3/3 Department of Public Works (EPWP) Programme

Unemployed for EPWP projects.

1-Apr-2011 31-Mar-2016 310 000 89 734 205 517 104 483

NSF/10/3/3/4 Nsingweni Consulting CC / Nsingweni - Kalwayi NGO

Learnership: IT-technician training.

1-Aug-2012 31-Jul-2017 153 247 42 689 88 111 65 136

NSF/10/3/3/5 University of Venda Skills programmes - reviving existing cooperatives; Learnerships for unemployed youth; Internships for unemployed graduades; RPL - Artisans.

21-Jan-2013 31-Dec-2015 26 679 2 049 10 117 16 562


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R’000 R’000 R’000 R’000

NSF/10/3/3/6 Sisonke Economic Development Agency

Provision of skills development programmes to benefit Sisonke District Municipality previously disadvantaged communities that will alleviate poverty, reduce unemployment and increase job creation.

1-Jan-2013 31-Dec-2015 78 861 21 720 36 045 42 816

NSF/10/3/3/7 Nkungumathe Youth Develop-ment Fund (Project 2)

Rural unemployed youth - artisan skills (apprenticeships and skills programmes).

25-Jun-2013 31-Dec-2016 22 310 6 049 9 786 12 524

NSF/10/3/3/8 Skillswise (Pty) Ltd Rural unemployed youth - Learnerships (Welding - mechanical / Electrical - construction)

5-Jun-2013 31-Dec-2015 46 558 11 020 24 471 22 087

NSF/10/3/3/9 Mothlompegi Management Consulting Projects

Prepare backyard operators for trade tests. Motor mechanics, panel beating, welding, construction and electricians.

5-Jun-2013 30-Jun-2015 13 811 5 590 12 714 1 097

NSF/10/3/3/12 Department of Agriculture, Forestry and Fisheries (DAFF)

Skills development of AgriBEE beneficiaries towards sustainable farming.

29-Sep-2014 31-Mar-2017 44 465 - - 44 465

Education and Health 113 149 12 395 19 709 93 440

NSF/10/3/4/5 Inkwanca Home Based Care Centre (IHBC)

NPO: Community Health Work Training.

20-Aug-2012 30-Jun-2015 4 177 1 217 4 045 132


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R’000 R’000 R’000 R’000

NSF/10/3/4/7 Nelson Mandela Childrens Hospital Trust

Executive management development programme, Hospital management development programme - nurse managers / nurse specialisation training programme, support staff development (IT & database management skills), clinical lecturers and clinical preceptors.

5-Jun-2013 31-Dec-2017 70 328 2 250 3 895 66 433

NSF/10/3/4/8 African Institute for Mathemati-cal Science

SA students bursaries forAIMS academic programmes, AIMSSEC teacher professional development programme.

28-Jun-2013 31-Mar-2016 18 131 4 964 7 805 10 326

NSF/10/3/4/9 South African National Council for the Blind (SANCB)

Skills development initiative for the blind.

9-May-2014 31-Mar-2016 20 513 3 964 3 964 16 549

Justice and Crime Prevention 207 826 18 316 204 842 2 984

NSF/10/3/5/2 Department of Correctional Services (Offender Training)

Offender training. 27-Mar-2012 31-Mar-2016 66 424 18 316 63 444 2 980

NSF/10/3/5/4 Chippa Investment Holdongs CC (PRASA)

Security officer and other skills programmes (unemployed) for full absorption by PRASA.

1-Aug-2012 31-Dec-2013 78 980 - 78 977 3

NSF/10/3/5/5 Chippa (SAPS) Project Transform SAPS reservists into SAPS professional trained security service's personnel.

1-Nov-2012 31-Dec-2013 62 422 - 62 421 1


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Co-operatives, Small Enterprises, NGOs and Communtiy Training Initiatives 457 302 143 888 304 210 153 092

NSF/10/3/6/10 SEDA BESD Programme Facilitators and emerging entrepreneurs.

17-Apr-2012 31-Mar-2016 84 000 1 120 1 680 82 320

NSF/10/3/6/14 King Hintsa TVET College Co-operative skills. 13-Apr-2012 30-Sep-2013 26 786 1 525 26 786 -

NSF/10/3/6/15 Jet Education Services (Jet 2) Youth employment creation programme (schools construction and renovations).

13-Apr-2012 30-Sep-2014 21 129 2 861 13 828 7 301

NSF/10/3/6/16 LHR Solutions - Letsatsi 2 Co-operative development.

1-Aug-2012 31-Jul-2015 163 509 73 019 125 091 38 418

NSF/10/3/6/17 Caroline Fashion Enterprise Fashion design learnership.

1-Aug-2012 31-Dec-2013 6 340 66 6 340 -

NSF/10/3/6/18 KMK Training Service (Pty) Ltd Fruit and vegetable producer training.

16-Aug-2012 31-Dec-2014 15 446 265 15 446 -

NSF/10/3/6/19 Tembalethu Trust Entrepreneurship (unemployed).

20-Aug-2012 31-Dec-2014 9 107 1 451 7 759 1 348

NSF/10/3/6/20 Furniture World Private College for Further Education & Training

Skills programmes and learnerships.

15-Jun-2014 31-Dec-2015 67 260 32 144 47 590 19 670

NSF/10/3/6/22 Siphumelele Skills Solutions Learnership in furniture making NQF Level 3.

31-Dec-2014 31-Dec-2015 39 728 15 039 39 333 395

NSF/10/3/6/23 Passionate About People Project 2

Youth training and workplace experience.

7-Jun-2013 31-Mar-2016 18 531 12 281 16 239 2 292

NSF/10/3/6/24 Caroline Fashion Enterprise 2 Fashion design learnership.

1-Jan-2014 31-Dec-2015 5 466 4 117 4 118 1 348


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R’000 R’000 R’000 R’000

Public Sector Capacity 2 504 213 525 210 1 367 684 1 136 529

NSF/10/3/7/10 Port Elizabeth TVET College Student/Learner expansion and capacity development.

1-Aug-2012 31-Dec-2015 24 954 -333 10 284 14 670

NSF/10/3/7/12 Goldfields TVET College Student/Learner expansion and capacity development.

1-Aug-2012 31-Dec-2015 18 659 - 15 328 3 331

NSF/10/3/7/13 Maluti TVET College Student/Learner expansion and capacity development.

1-Aug-2012 31-Dec-2015 30 364 - - 30 364

NSF/10/3/7/14 Motheo TVET College Student/Learner expansion and capacity development.

7-Sep-2012 31-Dec-2015 49 862 - 29 574 20 288

NSF/10/3/7/15 Central Johannesburg TVET College

Student/Learner expansion and capacity development.

1-Aug-2012 31-Dec-2015 37 770 323 885 36 885

NSF/10/3/7/16 Ekurhuleni East TVET College Student/Learner expansion and capacity development.

1-Aug-2012 31-Dec-2015 27 038 27 018 27 038 -

NSF/10/3/7/17 Ekurhuleni West TVET College Student/Learner expansion and capacity development.

1-Aug-2012 31-Dec-2015 61 931 46 731 50 594 11 337

NSF/10/3/7/18 Sedibeng TVET College Student/Learner expansion and capacity development.

1-Aug-2012 31-Dec-2016 21 195 10 668 11 191 10 004

NSF/10/3/7/19 South West Gauteng TVET College


2-Aug-2012 31-Dec-2015 47 207 8 181 9 864 37 343


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NSF/10/3/7/20 Tshwane North TVET College Student/Learner expansion and capacity development.

1-Aug-2012 31-Dec-2015 113 432 232 510 112 922

NSF/10/3/7/21 Tshwane South TVET College Student/Learner expansion and capacity development.

1-Aug-2012 30-Aug-2016 42 083 8 350 13 337 28 746

NSF/10/3/7/22 Western TVET College Student/Learner expansion and capacity development.

1-Aug-2012 31-Dec-2015 41 605 11 466 11 471 30 134

NSF/10/3/7/23 Coastal TVET College Student/Learner expansion and capacity development.

3-Jan-2012 31-Dec-2015 108 247 19 641 63 168 45 079

NSF/10/3/7/24 Elangeni TVET College Student/Learner expansion and capacity development.

1-Aug-2012 31-Dec-2015 86 469 4 707 23 161 63 308

NSF/10/3/7/25 Esayidi TVET College Student/Learner expansion and capacity development.

1-Aug-2012 31-Dec-2015 46 000 43 437 43 440 2 560

NSF/10/3/7/26 Majuba TVET College Student/Learner expansion and capacity development.

1-Aug-2012 31-Dec-2015 118 249 7 436 57 087 61 162

NSF/10/3/7/27 Mnambithi TVET College Student/Learner expansion and capacity development.

1-Aug-2012 31-Dec-2015 30 547 1 991 2 662 27 885

NSF/10/3/7/28 Mthashana TVET College Student/Learner expansion and capacity development.

1-Aug-2012 31-Dec-2015 41 347 10 532 37 461 3 886

NSF/10/3/7/29 Thekwini TVET College Student/Learner expansion and capacity development.

1-Aug-2012 31-Dec-2015 20 000 324 19 648 352


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NSF/10/3/7/3 Buffalo City TVET College Student/Learner expansion and capacity development.

3-Jan-2012 31-Dec-2015 26 912 7 373 11 886 15 026

NSF/10/3/7/30 Umfolozi TVET College Student/Learner expansion and capacity development.

1-Aug-2012 31-Dec-2015 134 649 38 995 123 867 10 782

NSF/10/3/7/31 Umgungundlovu TVET College Student/Learner expansion and capacity development.

1-Aug-2012 31-Dec-2015 75 367 2 578 27 763 47 604

NSF/10/3/7/32 Capricorn TVET College Student/Learner expansion and capacity development.

1-Aug-2012 31-Dec-2015 64 562 3 854 47 183 17 379

NSF/10/3/7/33 Lephalale TVET College Student/Learner expansion and capacity development.

1-Aug-2012 31-Dec-2015 100 000 18 752 19 381 80 619

NSF/10/3/7/34 Letaba TVET College Student/Learner expansion and capacity development.

1-Aug-2012 31-Dec-2015 22 815 754 1 592 21 223

NSF/10/3/7/35 Mopani South East TVET College


1-Aug-2012 31-Dec-2015 55 175 17 609 48 994 6 181

NSF/10/3/7/36 Sekhukhune TVET College Student/Learner expansion and capacity development.

1-Aug-2012 31-Dec-2015 44 100 19 992 27 752 16 348

NSF/10/3/7/37 Vhembe TVET College Student/Learner expansion and capacity development.

1-Aug-2012 31-Dec-2015 72 367 4 132 64 466 7 901

NSF/10/3/7/38 Waterberg TVET College Student/Learner expansion and capacity development.

1-Aug-2012 31-Dec-2015 39 392 2 767 18 192 21 200


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NSF/10/3/7/39 Ehlanzeni TVET College Student/Learner expansion and capacity development.

1-Aug-2012 31-Dec-2015 20 000 - 3 669 16 331

NSF/10/3/7/4 East Cape Midlands TVET College


2-Aug-2012 31-Dec-2015 102 396 26 466 42 857 59 539

NSF/10/3/7/40 Gert Sibande TVET College Student/Learner expansion and capacity development.

1-Aug-2012 31-Dec-2015 48 016 11 880 23 981 24 035

NSF/10/3/7/41 Nkangala TVET College Student/Learner expansion and capacity development.

1-Aug-2012 31-Dec-2015 29 455 -2 014 3 427 26 028

NSF/10/3/7/42 Orbit TVET College Student/Learner expansion and capacity development.

1-Aug-2012 31-Dec-2015 51 086 17 778 17 779 33 307

NSF/10/3/7/43 Taletso TVET College Student/Learner expansion and capacity development.

1-Aug-2012 31-Dec-2015 16 381 703 4 703 11 678

NSF/10/3/7/44 Vuselela TVET College Student/Learner expansion and capacity development.

4-Aug-2012 31-Dec-2015 31 039 5 559 28 071 2 968

NSF/10/3/7/45 Northern Cape Rural TVET College


1-Aug-2012 31-Dec-2015 70 123 22 491 68 808 1 315

NSF/10/3/7/46 Northern Cape Urban TVET College


1-Aug-2012 31-Dec-2015 34 814 2 419 28 286 6 528

NSF/10/3/7/47 Boland TVET College Student/Learner expansion and capacity development.

6-Sep-2012 31-Dec-2015 85 186 29 177 68 384 16 802

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R’000 R’000 R’000 R’000

NSF/10/3/7/48 College of Cape Town Student/Learner expansion and capacity development.

1-Aug-2012 31-Dec-2015 36 740 -203 25 866 10 874

NSF/10/3/7/49 False Bay TVET College Student/Learner expansion and capacity development.

1-Aug-2012 31-Dec-2015 59 006 12 690 46 919 12 087

NSF/10/3/7/5 Ikhala TVET College Student/Learner expansion and capacity development.

1-Aug-2012 31-Dec-2015 52 736 2 432 8 133 44 603

NSF/10/3/7/50 Northlink TVET College Student/Learner expansion and capacity development.

1-Aug-2012 31-Dec-2015 65 103 8 108 60 758 4 345

NSF/10/3/7/51 South Cape TVET College Student/Learner expansion and capacity development.

1-Aug-2012 31-Dec-2015 86 402 42 879 57 136 29 266

NSF/10/3/7/52 West Coast TVET College Student/Learner expansion and capacity development.

1-Aug-2012 31-Dec-2015 68 445 24 057 43 687 24 758

NSF/10/3/7/6 Ingwe TVET College Student/Learner expansion and capacity development.

1-Aug-2012 31-Dec-2015 8 093 1 617 7 136 957

NSF/10/3/7/7 King Hintsa TVET College Student/Learner expansion and capacity development.

1-Aug-2012 31-Dec-2015 25 558 243 466 25 092

NSF/10/3/7/8 King Sabata Dalindyebo TVET College


1-Aug-2012 31-Dec-2015 5 669 614 4 896 773

NSF/10/3/7/9 Lovedale TVET College Student/Learner expansion and capacity development.

7-Aug-2012 31-Dec-2015 5 667 804 4 943 724



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DIRECTOR-GENERAL PRIORITIES 5 720 216 1 411 903 4 652 012 1 068 202

Worker Education 36 136 9 932 23 758 12 377

NSF/10/4/1/1 Ditsela Danlep & Provincial Project

Advanced National Labour Educational Programme.

5-Jul-2011 31-Dec-2015 18 669 5 560 17 033 1 636

NSF/10/4/1/3 Workers College Project 2 Training of members of trade unions. Diplomas and degrees (UKZN): Industrial Working Life.

26-Jun-2013 31-Mar-2016 17 467 4 372 6 725 10 741

Skills System Capacity Building 85 342 29 566 54 629 30 713

NSF/10/4/2/6 SAICA Walter Sisulu University Capacity development for Charted Accountants programme acreditation by SAICA.

3-Jan-2012 31-Dec-2015 84 403 29 264 54 047 30 356

NSF/10/4/2/7 Quality Council for Trades and Occupations (QCTO)

Systems, processes and capacity (Training of Quality Development Facilitators)

1-Aug-2012 28-Feb-2015 939 302 582 357

Training Lay-off Scheme 66 095 - 51 334 14 760

NSF/10/4/3/1 MERSETA TLS Training lay-off scheme Ongoing Ongoing 66 095 - 51 334 14 760

Academia, Research and Development 39 091 6 366 6 366 32 725

NSF/10/4/4/10 National Institute for Humanities and Social Sciences (NIHSS)

PhDs in Humanties and Social Siences, African pathways and catalytic projects (Heritage hubs and other projects).

Ongoing Ongoing 30 400 - - 30 400









Date


Budget)

R’000 R’000 R’000 R’000

NSF/10/4/4/9 UCT Hairdressing Hair Testing and Cosmetic Toxicology Laboratory. Development of Specialisation in the Hairdressing Sub-Sector.

19-May-2014 31-Mar-2016 8 691 6 366 6 366 2 325

Bursaries 4 478 564 1 074 769 3 919 253 559 311

NSF/10/4/5/1 National Research Foundation (NRF)

Post graduate bursaries. Ongoing Ongoing 485 837 162 803 467 402 18 435

NSF/10/4/5/2 National Student Financial Aid Scheme (NSFAS)

Under and post graduate bursaries.

Ongoing Ongoing 3 977 426 911 966 3 451 851 525 575

NSF/10/4/5/4 International Scholarships International scholarships. Ongoing Ongoing 15 301 - - 15 301

DHET projects for Academia, Research, Capacity and Development 1 014 988 291 270 596 672 418 316

NSF/10/4/6/7 National Artisan Moderation Body (NAMB)

Artisan development systems and capacity building for national artisan development.

1-Feb-2012 31-Mar-2016 65 672 10 551 34 527 31 145

NSF/10/4/6/8 HETMIS System Management information system.

1-Jul-2012 31-Mar-2016 35 647 1 969 2 050 33 597

NSF/10/4/6/5 JET education services (Jet 1) TVET college improvement project.

23-Sep-2011 31-Mar-2016 78 924 16 803 61 742 17 182

NSF/10/4/6/2 ADRS Wits EPU Research and capacity development - link to HSRC (Labour Market Inteligence Project)

3-Dec-2011 31-Mar-2016 49 767 5 285 11 347 38 420

NSF/10/4/6/11 South African Institute of Chart-ed Accountants (SAICA)

Capacity Development (TVET - CFOs and HR generalists)

1-Apr-2012 31-Mar-2016 135 905 55 678 123 289 12 616


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NSF/10/4/6/1 Human Science Research Council (HSRC)

Labour Market Inteligence Project

7-Feb-2012 31-Mar-2016 74 500 6 714 34 036 40 464

NSF/10/4/6/10 University of KZN - CCRRI project

Research / Implementation of Soudien Committee report / Obstacles/ supply / diversity - entrants of professions through HET-system.

26-Apr-2012 31-Mar-2016 35 476 5 920 10 848 24 628

NSF/10/4/6/12 UKZN Maurice Webb Race Relations Unit

African researchers - humanities and social sciences.

26-Apr-2012 31-Mar-2016 3 719 669 3 719 -

NSF/10/4/6/9 CEPD - HSS Project Research - Humanities and Social Sciences

5-Jun-2012 31-Mar-2016 18 720 12 713 15 736 2 984

NSF/10/4/6/13 CEPD: Research and Public Engagement - Post School Education & Training

Research and Public Engagement - Post School Education & Training

1-Aug-2012 31-Mar-2016 88 925 8 367 52 084 36 841

NSF/10/4/6/14 NAMB - NAD Support Centre (EEC)

Ekurhuleni Eeast TVET College Support Centre for the National Artisan Development

17-Sep-2012 31-Mar-2016 25 340 6 590 11 605 13 735

NSF/10/4/6/28 Ministerial Task Team - Mathematics and Science Foundation

Ministerial task teams (Additional budget)

2-May-2012 31-Mar-2016 1 234 7 26 1 208

NSF/10/4/6/24 Central Application Service - Phase 1 (Clearing House)

Appoint a service provider to facilitate and implement pase 1of the central application service in the form of clearing house.

11-Dec-2012 31-Mar-2016 4 000 3 072 3 910 90


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R’000 R’000 R’000 R’000

NSF/10/4/6/23 Adult Education and Traning Curriculum Development

Curriculum Development. 6-Dec-2012 31-Mar-2016 11 773 1 022 1 354 10 419

NSF/10/4/6/22 DHET Intervention at Universities: Good Governance and Admin

Interventions at Universities to restore good governance and effective administration: University of Zululand, WSU, TUT, VUT and University of Limpopo.

1-Apr-2012 31-Mar-2016 35 347 26 621 35 346 1

NSF/10/4/6/27 Walter Sisulu University: Infrastructure Development

Installing modern teaching and learning technology at Mthatha campuses.Installing security palisade fencing around residence.

9-Jul-2012 31-Mar-2016 64 300 5 550 36 950 27 350

NSF/10/4/6/26 Post-School Information Systems Appointment of a Project Manager for HETMIS (60 month period)

29-Aug-2012 31-Mar-2016 6 692 1 735 1 522 5 170

NSF/10/4/6/25 Multi-Media Communication Campaign

Develop and implement a 12-month long multi-media communication campaign for DHET.

31-Jul-2012 31-Mar-2016 18 705 7 027 9 044 9 661

NSF/10/4/6/21 Project Co-ordination Unit: DHET Capacity Development Support Grant

Apponitment of personnel for project coordination unit.

21-Sep-2012 31-Mar-2016 3 807 931 1 103 2 704

NSF/10/4/6/20 Special Infrastructure Project - Presidential SIPs

Resourcing of the special projects office of DHET.

1-Sep-2012 31-Mar-2016 36 654 6 205 6985 29 669


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Budget)

R’000 R’000 R’000 R’000

NSF/10/4/6/19 Screening TVET Textbooks Screening and re-screening of student text books and lecturer guides for NC(V) programmes in TVET Colleges.

1-Apr-2012 31-Mar-2016 1 161 765 1 161 -

NSF/10/4/6/18 Post School Infrastructure: Phase 1: Project Manager

Resourcing of the special projects office of DHET.

1-Apr-2012 31-Mar-2016 5 646 - 19 5 627

NSF/10/4/6/17 RPL for Artisans Project (Indlela) Recognition of prior learning for artisans.

12-Jun-2012 31-Mar-2016 41 000 2 385 32 606 8 394

NSF/10/4/6/16 Open and Distance Learning Development of an open and distance education and training system - Phase 1

4-Jun-2012 31-Mar-2016 4 086 2 554 2 554 1 532

NSF/10/4/6/15 Ministerial Task Team on SAIVCET

Ministerial task team for the establishment of the South African Institute for Vocational and Continuing Education and Training

1-Mar-2012 31-Mar-2016 1 500 540 788 712

NSF/10/4/6/32 Skills Branch: Provision of Organisation of Original Development Project

Organisation development project.

1-May-2012 31-Mar-2016 1 138 - 724 414

NSF/10/4/6/30 Ministerial Special Projects Capacitating unit responsible for establishing ministerial task teams and committees and coordinating work of the various Ministerial Task Teams.

6-Dec-2012 31-Mar-2016 25 064 11 454 11 454 13 610


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Budget)

R’000 R’000 R’000 R’000

NSF/10/4/6/34 Higher Education South Africa (HESA)

Building capacity of university and TVET college academic staff to integrate HIV AIDS issues in the curricula.

1-Aug-2013 31-Mar-2016 25 648 6 215 6 215 19 433

NSF/10/4/6/37 National Examinations & Assessments (CDNEA)

Capacity development support to National Examinations and Assessment.

20-Jan-2015 31-Mar-2016 66 018 44 547 44 547 21 471

NSF/10/4/6/36 SAQA-CDS Projects Establishment of National Comprehensive and Independent career development helpline and advisory services - to suport NAF, NSDS.

1-Sep-2010 31-Mar-2016 48 620 39 381 39 381 9 239

SKILLS INFRASTRUCTURE 3 644 825 425 439 873 514 2 771 311

Public Delivery Infrastructure 3 565 807 407 425 794 809 2 770 998

NSF/10/5/1/1 University of Pretoria (Veterinary project)

Veterinary programme 20-Sep-2012 31-Dec-2016 113 612 81 391 86 069 27 543

NSF/10/5/1/2 University of Pretoria (MBChB programme)

MBChB- programme 1-Aug-2012 31-Dec-2015 311 042 127 605 203 355 107 687

NSF/10/5/1/3 University of Johannesburg Engineering Development

Workplace experience facilities for graduates.

30-Apr-2013 31-Dec-2015 212 809 78 840 132 459 80 350

NSF/10/5/1/4 Cape Peninsula University of Technology Renewable Energy Infrastructure Project (CPUT)

Renewable energy learning facilities.

25-Jan-2013 31-Dec-2016 105 578 8 794 12 492 93 086

NSF/10/5/1 DHET TVET College Infrastructure Development

16 TVET college campuses.

9-Dec-2013 30-Jun-2016 2 635 350 25 536 275 175 2 360 175

NSF/10/5/1/6 ADA Holdings - Ingwe Projects TVET Colleges Infrastructure

3-Apr-2014 31-Mar-2016 187 416 85 259 85 259 102 157







Date


Budget)

R’000 R’000 R’000 R’000

Community Education Centres 79 018 18 014 78 705 313

NSF/10/5/2/2 National Institute of the Deaf (NID 2)

Disabled people and improve infrastructure facilities.

11-Apr-2012 31-Mar-2017 79 018 18 014 78 705 313

Human Resource Development Strategy of South Africa (HRDSSA) 55 200 7 908 33 806 21 394

Research 55 200 7 908 33 806 21 394

NSF/10/1/1 HRDSA Funding Human Resource Development Strategy of South Africa Priorities (HRDSSA)

28-Mar-2013 31-Mar-2016 55 200 7 908 33 806 21 394

TOTAL AS PER ANNUAL FINANCIAL STATEMENTS 15 660 054 3 108 733 9 137 531 6 522 521


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NATIONAL SKILLS FUND • Funding to Skill our Nation

ISBN: 978-0-621-43917-5 • RP266/2015 2014/15

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