TABLE OF CONTENTS Page - National Government · 2015-04-21 · ETDP • SETA I Annual Report...

1ETDP • SETA I Annual Report 2013/14

TABLE OF CONTENTS Page

Part A: General Information ................................................................................................................ 31 ETDP SETA’s Information ................................................................................................................................... 4

2 List of Abbreviations/Acronyms ......................................................................................................................... 5

3 Executive Authority of the ETDP SETA .................................................................................................................. 7

4 Foreword by the Chairperson ............................................................................................................................ 8

5 Chief Executive Offi cer’s Overview .................................................................................................................. 11

6 Statement of responsibility and confi rmation of accuracy of the annual report ....................................................... 14

7 Strategic Overview ........................................................................................................................................ 15

7.1 Vision ................................................................................................................................................15

7.2 Mission ..............................................................................................................................................15

7.3 Values ................................................................................................................................................15

8 Legislative and Other Mandates ...................................................................................................................... 15

8.1 Legislative ...........................................................................................................................................15

8.2 Policy Mandates ..................................................................................................................................16

9 Organisational Structure ................................................................................................................................. 17

Part B: Performance Information ........................................................................................................ 191 Auditor-General’s Report: Predetermined Objectives ........................................................................................... 20

2 Situational Analysis ........................................................................................................................................ 20

2.1 Service Delivery Environment ..................................................................................................................20

2.2 Organisational Environment....................................................................................................................20

2.3 Key Policy Developments and Legislative Changes .....................................................................................21

2.4 Strategic Outcome Oriented Goals ..........................................................................................................21

3 Performance Information by Programme ........................................................................................................... 21

3.1 Programme 1: Development of a credible Sector Skills Plan ..........................................................................21

3.2 Programme 2: Supporting FET institutions to be responsive to the ETD sector and national priorities ......................23

3.3 Programme 3: Teacher Development in support of the Integrated Strategic Planning Framework for Teacher Education and Development in South Africa ..............................................................................26

3.4 Programme 4: Increasing access to and Graduate Output in Higher Education and Further Education and Training institutions ..................................................................................................28

3.5 Programme 5: Youth Development through increasing access to Workplace Learning ........................................31

3.6 Programme 6: Constituency Support through skills development ....................................................................32

3.7 Programme 7: Strengthening the Quality Assurance system and improving Monitoring and Evaluation impact ........35

3.8 Programme 8: Improving organisational administration and management to enhance organisational performance ..38

3.9 Overview of Provincial Performance ........................................................................................................42

4 Revenue Collection ......................................................................................................................................... 60

2 ETDP • SETA I Annual Report 2013/14

Part C: Governance .......................................................................................................................... 611 Introduction ................................................................................................................................................... 62

2 Portfolio Committees ....................................................................................................................................... 62

3 Executive Authority ......................................................................................................................................... 82

4 The ETDP SETA Board ..................................................................................................................................... 62

4.1 Composition of the ETDP SETA Board.......................................................................................................62

4.2 Qualifi cations and Expertise of the Board members.....................................................................................63

4.3 Accounting Authority Meetings Attendance ................................................................................................64

4.4 Accounting Authority Committees and Chambers ........................................................................................65

4.5 Chamber Meetings Attendance...............................................................................................................66

4.6 Remuneration of the Board members ........................................................................................................70

4.7 ETDP SETA Strategic Partners ..................................................................................................................70

5 Risk Management .......................................................................................................................................... 71

6 Internal Controls ............................................................................................................................................ 71

7 Audit Committee and Internal Audit Functions .................................................................................................... 71

8 Compliance with Laws and Regulations ............................................................................................................ 71

9 Fraud and Corruption ..................................................................................................................................... 71

10 Minimising Confl ict of Interest .......................................................................................................................... 71

11 Code of Conduct ........................................................................................................................................... 72

12 Health, Safety and Environmental Issues ........................................................................................................... 72

13 Audit Committee Report .................................................................................................................................. 73

Part D: Human Resource Management ............................................................................................... 751 Introduction ................................................................................................................................................... 76

2 Human Resource Oversight Statistics ................................................................................................................ 77

Part E: Financial Information ............................................................................................................. 811 Report of the Auditor-General to Parliament on the Education, Training and Development Practices

Sector Education and Training Authority (ETDP SETA) ......................................................................................... 82

2 Annual Financial Statements ............................................................................................................................ 85


PART A: GENERAL INFORMATION


1 ETDP SETA’s InformationName:

EDUCATION, TRAINING AND DEVELOPMENT PRACTICES SECTOR EDUCATION AND TRAINING AUTHORITY

Referred to in this report as

ETDP SETA

Physical Address:

24 Johnson Road

Riverwoods Offi ce Park

BEDFORDVIEW

2008

Postal Address:

Private Bag X105

MELVILLE

2109

Contact details:Contact Person: Nkhensani Mabunda

Telephone Number: +27(0)11 372 3300

Email Address: [email protected]

Website Address: www.etdpseta.org.za

Addresses of the nine provincial offi ces are shown on the back cover of the report.

External Auditors:

The Auditor-General of South Africa

Banker:

Standard Bank of South Africa


2 List of Abbreviations / Acronyms

AA Accounting Authority

ABET Adult Basic Education and Training

AET Adult Education and Training

AFS Annual Financial Statements

AGSA Auditor-General of South Africa

ANA Annual National Assessment

APP Annual Performance Plan

APPETD Association of Private Providers of Education, Training and Development

AQP Assessment Quality Partner

ATR Annual Training Report

B.Ed Bachelor of Education

CAPS Curriculum Assessments Policy Statements

CBO Community-based Organisation

CDOs Career Development Offi cers

CGOs Career Guidance Offi cers

CEO Chief Executive Offi cer

CFO Chief Financial Offi cer

COO Chief Operations Offi cer

COSATU Congress of South African Trade Unions

DBE Department of Basic Education

DQP Development Quality Partner

DHET Department of Higher Education and Training

ECD Early Childhood Development

ETD Education, Training and Development

ETDP SETA Education, Training and Development Practices Sector Education and Training Authority

ETQA Education and Training Quality Assurance

FET Further Education and Training

GETC General Education and Training Certifi cate

GRAP Generally Recognised Accounting Practice

HEIs Higher Education Institutions

HESA Higher Education South Africa

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

HR Human Resources

HRDSA Human Resource Development Strategy for South Africa

ICDL International Computer Drivers Licence Programme

ICT Information and Communications Technology

ISPFTED-SA Integrated Strategic Planning Framework for Teacher Education and Development in South Africa

LIASA Library and Information Association of South Africa


LSEN Learners with Special Educational Needs

MIS Management Information System

MTSF Medium Term Strategic Framework

NAISA National Alliance of Independent School Associations

NASGB National Association of School Governing Bodies

NEHAWU National Education, Health and Allied Workers’ Union

NGO Non-Governmental Organisation

NPO Non-Profi t Organisation

NQF National Qualifi cation Framework

NSA National Skills Authority

NSC National Senior Certifi cate

NSDS National Skills Development Strategy

NSFAS National Student Financial Aid Scheme

NYC National Youth Council

NYDA National Youth Development Agency

OECD Organisation of Economic Corporation and Development

OFO Organising Framework of Occupations

OHS Occupational Health and Safety

PFMA Public Finance Management Act

PGCE Post Graduate Certifi cate in Education

PIVOTAL Professional, Vocational, Technical and Academic Learning

PMDS Performance Management Development System

PWD People living with Disabilities

QCTO Quality Council on Trades and Occupations

RPL Recognition of Prior Learning

SACP South African Communist Party

SACPO South African College Principals’ Organisation

SAQA South African Qualifi cations Authority

SCM Supply Chain Management

SDFs Skills Development Facilitators

SETA Sector Education and Training Authority

SGB School Governing Body

SIP Strategic Infrastructure Programme

SSP Sector Skills Plan

TVET Technical Vocational Education and Training

UoT University of Technology

WCED Western Cape Education Department

WIL Work Integrated Learning

WPE Workplace Experience

WSP Workplace Skills Plan


3 The Executive Authority of the ETDP SETA

Minister of Higher Education and TrainingHonourable Dr E. B. Nzimande

Deputy Minister of Higher Education and TrainingHonourable M.C. Manana

The Minister of Higher Education and Training, Honourable Dr E. B. Nzimande, assumes the role of Executive Authority and is supported by the Deputy Minister, Honourable M.C. Manana. Among other areas of responsibilities, they are championing the Government Medium Term Strategic Framework, Outcome 5: A skilled and capable workforce to support an inclusive growth path.

The ETDP SETA appreciates the commitment and support by both the Minister of Higher Education and Training and the Deputy Minister.


4 Foreword by the Chairperson

Ms Shirley MabuselaBoard Chairperson

I am pleased to present the 2013/14 Annual Report for the Education, Training and Development Practices Sector Education and Training Authority (ETDP SETA). This report provides a summary of the activities carried out by the organisation during the year under review. It is also an account of the third year of the National Skills Development Strategy (NSDS) III.

The ETDP SETA Board maintains high standards of corporate governance. The Chairperson of the Accounting Authority is ultimately responsible to all stakeholders for the organisation’s strategy, activities, fi nancial performance and for the effi cient utilisation of the organisation’s resources. With the assistance of the Audit Committee, the Board is able to manage the risks and internal control processes.

Over the past 13 years, our organisation played a pivotal role in the skills development revolution and demonstrated a great impact in the ETD sector. This could not have been done better than with crafting an appropriate Strategic Plan and Annual Performance Plan that are results or outcomes-based, and aimed at addressing the skills shortages in the sector. Our eight programmes, refl ected in the Annual Performance Plan, have clear objectives with specifi c target groups.

The programmes are as follows:

Programme 1: Development of a credible ETD Sector Skills Plan

This programme is aimed mainly at identifying the gaps between the supply of and the demand for skills in our sector in order to design and develop relevant interventions to minimise the gap. The exercise culminates in the development of the scarce and critical skills guide to assist the process of skills planning and development in the sector. In addition to the scarce and critical skills guide we develop a career guide for Grades 9-12 to assist learners in choosing appropriate career pathways.

Programme 2: Supporting FET and Higher Education Institutions to be responsive to the ETD and national priorities

This programme is aimed at supporting lecturers and management in these institutions in order to improve the quality of research, teaching and learning.


Programme 3: Teacher development and support

This programme supports the Provincial Departments of Basic Education in ensuring that teachers’ skills are enhanced for improved classroom practice. The programme also provides fi nancial assistance to those who study towards a teaching qualifi cation. Early Childhood Development and Grade R teaching have been prioritised. I am also pleased to report that not only are teachers benefi ting from the programme on content knowledge, but that schools’ management teams are also benefi ting from appropriate training. We have also paid particular attention to schools that cater for learners with special education needs in the programme. The computer literacy programme, in the form of the End User Computing Learnership, was appreciated by many teachers who received the training. We believe that this programme will go a long way in assisting teachers in the execution of their tasks and in facilitating progress towards meeting the needs of education in an information age.

Programme 4: Increasing student access to and graduate output in Higher Education and Further Education institutions

This programme makes provision for student bursaries. The Matric Rewrite Project is one of the most effective projects in improving the results of the students who were unable to pass matric at the fi rst attempt. We have seen many learners who received the second chance to write matric swelling the ranks of the FETs and Higher Education Institutions (HEIs). Indeed a dream realised! The programme also affords FET and University of Technology (UoT) students with workplace experience and provides stipends to these learners.

Programme 5: Youth development

It is through this programme that Learnerships and Internships are provided to the youth to increase their skills and employability.

Programme 6: Constituency support

This programme provides support to all our constituencies in skills development by providing discretionary grants for training and development.

Programme 7: Strengthening the quality assurance system and improving monitoring and evaluation

The effective quality assurance mechanism that we have put in place has made it possible to achieve the intended objectives of the programmes.

Programme 8: Improving organisational administration and management to enhance organisational performance

The fi rst seven programmes can only be achieved if the organisational policies, processes and people are effective. This programme ensures that the organisation is well positioned to fulfi l its mandate.

In addition to our Head Offi ce in Johannesburg, we have nine effective and functioning provincial offi ces. The offi ce expansion has allowed us to bring services closer to the people and to the benefi ciaries of our programmes.

For more details on the extent of achievement, please read the entire report.

It is my belief that an organisation can stand any test of time with effective governance. It is encouraging to work with a committed team; and the ETDP SETA’s Accounting Authority (AA) members have always demonstrated their commitment to skills development. The 15-member AA is supported by the following Committees and Chambers:

• Audit Committee• Human Resources Committee and the Remuneration Committee• Finance Committee• Quality Assurance Committee

and

• Schooling Chamber• FET/TVET Chamber• Higher Education and Research Chamber• ECD and AET Chamber• Quality Provisioning Chamber


In addition to the Committees and Chambers, the contribution made by our constituent organisations and service providers is invaluable. The Accounting Authority/Board meets every quarter to oversee the functioning of the organisation and holds an annual general meeting.

Despite the minor challenges we had in this fi nancial year, we have again obtained an unqualifi ed audit report, and have done so, since inception. In the prior year, we obtained a clean audit and we were presented with a Certifi cate of Excellence by the offi ce of the Auditor-General. We believe that in the next fi nancial year we will again obtain a clean audit, not just an unqualifi ed audit report.

Ensuring that we do the right things in the right way requires the right leadership! The ETDP SETA Board is dedicated to continue to lead this organisation to greater heights.

“We do not see governance as a box-ticking exercise or simply related to processes and controls but rather as a guide to ensure we do the right things in the right way” - Lain Napier.

I extend my appreciation to all those who served on the ETDP SETA Accounting Authority, Executive Committee, Chambers and Committees of the Board during the 2013/14 fi nancial year. My gratitude is also extended to the Chief Executive Offi cer, management and staff, and all the constituencies of the ETDP SETA for their hard work, passion and dedication. Despite the many challenges, their contribution resulted in yet another successful year.

________________________________Ms Shirley MabuselaBoard ChairpersonETDP SETADate: 31 July 2014


5 Chief Executive Offi cer’s Overview

Ms Nombulelo NxesiChief Executive Offi cer

Introduction The ETDP SETA adopted various approaches to the delivery of services to its constituencies placing particular emphasis on effi ciency. In delivering its services, transformation goals were taken into account with special focus on supporting designated groups. Communities in rural areas, women, the youth and people living with disabilities were specifi cally targeted to access some of the skills development programmes. The annual report provides an account of the extent to which programme objectives were met, challenges that were experienced, and information on fi nancial performance.

General fi nancial review of the organisation

The SETA received all the levy income that was owed in the fi nancial year, amounting to R338.4 million. Contributions from Provincial Departments of Education and the National Department of Education amounted to R93.4 million. This included an amount of R19.3 million that was unpaid in the 2012/13 fi nancial year from the Limpopo Department of Education. The expected contribution for the year under review was not received. Interest of R17.8 million was received due to the high level of cash in the bank.

Mandatory grant expense was above expectations at R85.2 million indicating a higher level of participation by levy paying organisations in the sector.

Discretionary expenditure was lower than anticipated, as commitments did not exhibit as costs in the year. Administration expenses were also low largely in line with low discretionary spending.

Spending trends

(fi gures in R’000) 2013/14 2012/13 2011/2012

Mandatory 85 157 138 742 122 541

Discretionary 136 096 100 816 129 790

Administration 115 930 101 913 85 931


Mandatory grants expenditure exhibits a rising trend over the years. The reduction in the rate of the mandatory grant from 50% to 20% in the year under review must be taken into account. This is expected as payrolls increase and awareness programmes run by the SETA increase participation.

The year under review exhibited a high level of programme commitments. Most programmes delivered through universities commence in February of each year, which means that programme implementation is in the last quarter of the fi nancial year (January - March), in line with the academic calendar.

Programmes targeting FET College lecturers and teacher development had to be held during the school holidays. This was to ensure that learning and teaching time in these learning institutions was not negatively impacted by teachers’ and lecturers’ studies. Therefore most of these programmes were implemented during the third and fourth quarter which affected programme spending trends.

Administration expenses have shown a rising trend in recent years, refl ecting infl ationary increase and support for high levels of discretionary programmes implemented.

Capacity constraints and challenges

Capacity constraints and challenges in Information and Communications Technology (ICT) and marketing and communications were addressed by acquiring high level skills in these units to drive strategy development and implementation. As a result, the SETA enjoyed a high media profi le during the year under review and has a revised and approved ICT strategy. This ICT strategy is currently being implemented.

Discontinued activities

There has been no discontinuation or planned discontinuation of any major part of the SETA’s operations.

New or proposed activities

The ETDP SETA will be supporting two new universities in Mpumalanga and Northern Cape as part of its constituency skills development programmes. This support should give the two universities the much needed human resource capacity to strengthen their operations.

As a contribution to the Strategic Infrastructure Projects (SIP 14) for the FET refurbishment, the ETDP SETA will be training FET lecturers on scarce and critical skills programmes as well as making fi nancial contributions to the effort.

A partnership between DHET and ETDP SETA has been established to develop an induction programme and to train all FET College Council members with the view to capacitating them on effective corporate governance.

Furthermore, the ETDP SETA has increased its Career Development Support in the FET Colleges by ensuring that all FET campuses have at least one Career Development Offi cer (CDO). This will ensure that students, as well as youth in the surrounding areas, are well informed and properly guided in making suitable career choices.

Supply Chain Management (SCM)

A Continuous Improvement Plan is in place to ensure an effective and effi cient supply chain management capability. The bid committees are in place and where materiality is signifi cant, the Bid Evaluation Committee is extended to include constituency representatives of the Accounting Authority who are experts in the various programmes. The SCM Policy of the ETDP SETA prohibits members of the governance structures from participating in the bidding process.

There have been no material fi ndings by the Auditor-General on the SCM of the ETDP SETA.

Audit report matters

All audit fi ndings from prior years have been addressed satisfactorily at the reporting date.

Outlook/plans for the future

The ETDP SETA is fi nancially viable and has suffi cient funding streams to implement its strategic plan in the light of all current legislation.


Events after the reporting date

There were challenges experienced on the Commitment Register due to the large volume of contracts that included prior years, the split of contracts per province and Sub-programmes. An extension on the submission date of information was requested and granted in order to conduct due diligence on the Commitment Register. This process enabled management to correct the information gaps identifi ed during the audit period as well as to correct the misstatements that were identifi ed in the initial audit phase. Corrections on performance information on Programmes 3 and 4 were made.

In order to improve the quality of information, the organisation is in a process of implementing an integrated information management and reporting system and the Commitment Register is updated and reviewed regularly.

Acknowledgement/appreciation

I would like to thank all the partners that supported the SETA in delivering on the Annual Performance Plan, both nationally and provincially.

The ETDP SETA management commits to continuously improve its services offered to constituencies by remaining relevant in terms of programme offerings and providing value for money.

“Coming together is a beginning; keeping together is progress; working together is success.” - Henry Ford

_________________

Ms Nombulelo NxesiChief Executive Offi cerETDP SETADate: 31 July 2014


6 Statement of responsibility and confi rmation of accuracy of the annual reportTo the best of my knowledge and belief, I confi rm the following:

All information and amounts disclosed in the annual report is consistent with the annual fi nancial statements audited by the Auditor-General.

The annual report is complete, accurate and is free from any omissions.

The annual report has been prepared in accordance with the guidelines on the annual report as issued by National Treasury.

The Annual Financial Statements (Part E) have been prepared in accordance with the Generally Recognised Accounting Practice (GRAP) standards applicable to the ETDP SETA.

The Board is responsible for the preparation of the annual fi nancial statements and for the judgements made in this information.

The Board is responsible for establishing and implementing a system of internal control that has been designed to provide reasonable assurance as to the integrity and reliability of the performance information, the human resources information and the annual fi nancial statements.

The Auditor-General is engaged to express an independent opinion on the annual fi nancial statements.

In our opinion, the annual report fairly refl ects the operations, the performance information, the human resources information and the fi nancial affairs of the ETDP SETA for the fi nancial year ended 31 March 2014.

Yours faithfully

_____________________

Chief Executive Offi cerMs Nombulelo NxesiDate: 31 July 2014

_______________________________

Chairperson of the Board

Ms Shirley Mabusela

Date: 31 July 2014


7 Strategic Overview

7.1 VisionTo promote and facilitate the development and improvement of the skills profi le of the sector’s workforce in order to benefi t employers, workers and employees in the sector.

7.2 MissionTo support its vision, the ETDP SETA has as its mission the promotion, facilitation and development of education, training and development in which:

• The skills levels of employees and workers are raised• There is a healthy balance between supply and demand in the labour market• There are diverse, fl exible routes for initial and in-service education and training• A variety of career paths is available• The quality of education and training provided is improved• The levy grant scheme is effi ciently administered• There is regular liaison with providers, other SETAs, the Department of Higher Education and Training (DHET), the National Skills

Authority (NSA), the South African Qualifi cations Authority (SAQA), the Quality Councils, the Professional Bodies and others• Internal and external communication is effective in order to advance national human resource and skills development• Dialogue and interaction is encouraged between public and private entities in the sector with regard to skills transfer and training• Good service delivery is encouraged• Employers, workers and employees in the sector benefi t from quality training, higher productivity and harmonious mutual dependence

7.3 ValuesThe ETDP SETA upholds the following values:

• Transparency• Fairness• Courteousness and caring• Honouring deadlines• Promotion of quality among all stakeholders• Co-operative governance• Approaching work in a developmental manner• Continuous improvement• Sustainable environment

8 Legislative and Other Mandates

8.1 LegislativeThe ETDP SETA falls under Schedule 3A of the Public Finance Management Act No.1 of 1999 (as amended). The SETA’s mandate is derived from the Constitution of the Republic of South Africa which gives everyone the right to education. This constitutional mandate is strengthened by the following key pieces of legislation which are directly applicable to the ETDP SETA:

• The Skills Development Act No. 97 of 1998 (as amended in 2008)• The Skills Development Levies Act No. 9 of 1999• The National Qualifi cations Framework Act No. 67 of 2008 (as amended in August 2010)• The Public Finance Management Act No. 1 of 1999 (as amended) and its related National Treasury Regulations (as amended)


8.2 Policy mandates

8.2.1 The Medium Term Strategic Framework (MTSF) 2009 - 2014

The Government’s Medium Term Strategic Framework (MTSF) for the period 2009-2014 informed the development of the ETDP SETA’s fi ve-year strategy. It provides a guide for planning and resource allocation across all spheres of government, including the ETDP SETA as one of the 21 public entities charged with facilitation and promotion of skills development in the ETD sector. Therefore, the centrality of skills development which is the ETDP SETA’s primary mandate is clearly stated in the MTSF thus: “critically, investment in quality education for all young people and in skills development should form the backdrop of government’s approach”.

8.2.2 The National Skills Development Strategy 2011/12 - 2015/16

The ETDP SETA APP’s eight programmes are underpinned by the National Skills Development Strategy (NSDS) III promulgated by the Minister of Higher Education and Training. Programmes 1 to 8 of the ETDP SETA’s APP are based on the eight goals of the NSDS III, as listed below:

• Establishing a credible institutional mechanism for skills planning• Increasing access to occupationally-directed programmes• Promoting the growth of a public FET system that is responsive to sector, local, regional and national skills needs and priorities• Addressing the low level of youth and adult language and numeracy skills to enable additional training• Encouraging better use of workplace-based skills development• Encouraging and supporting cooperatives, small enterprises, worker-initiated programmes, Non-Governmental Organisations

(NGOs) and community training initiatives• Increasing public sector capacity for improved service delivery and supporting the building of a developmental state• Building career and vocational guidance

Furthermore, the ETDP SETA’s strategic development goals of black (85%), women (60%), youth (60%), rural (60%) and disability (5%) are an attempt to address the six key developmental and transformation imperatives of the NSDS III, namely:

• Class and Race• Gender• Geography (rural development)• Age• Disability• HIV/AIDS

8.2.3 The Human Resource Development Strategy of South Africa

The NSDS III is based on the Human Resource Development Strategy for South Africa (HRDSA) (2010-2030). The HRDSA is a macro-strategy which seeks to locate education and training within the broader developmental agenda of the country. It ensures common alignment of various government programmes in addressing human development challenges. Therefore, by basing its strategic and annual performance plans on the NSDS III, the ETDP SETA also seeks to achieve the fi rst six outcomes of the HRDSA.


9 Organisational Structure


PART B: PERFORMANCE INFORMATION


1 Auditor-General’s Report: Predetermined ObjectivesThe Auditor-General 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 ETDP SETA for the year ended 31 March 2014:

• Programme 2: Supporting FET institutions to be responsive to the ETD sector and national priorities • Programme 3: Teacher development in support of the ISPFTED-SA • Programme 4: Increasing student access to and graduate output in higher education and further education institutions • Programme 5: Youth development for employability • Grants – Mandatory and previously committed

The Auditor-General evaluated the reported performance information against the overall criteria of usefulness and reliability.

The Auditor-General 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.

The Auditor-General further performed tests to determine whether indicators and targets were well defi ned, verifi able, specifi c, measurable, time bound and relevant, as required by the National Treasury’s Framework for Managing Programme Performance Information (FMPPI).

The Auditor-General assessed the reliability of the reported performance information to determine whether it was valid, accurate and complete.

The Auditor-General did not raise any material fi ndings on the usefulness and reliability of the reported information of the selected programmes.

2 Situational Analysis

2.1 Service delivery environmentThe Education, Training and Development (ETD) sector is a diverse sector which is comprised of several sub-sectors such as pre-schooling - Early Childhood Development (ECD), schooling (public and private), technical and vocational education and training (TVET), higher education (public and private), adult education and training (AET), trade unions, political parties, non-governmental organisations, and library and archival services. These sub-sectors have diverse skills development needs, which the ETDP SETA has to respond to, through its Five Year Strategic Plan and Annual Performance Plan.

In order to determine the sub-sector’s skills needs and prioritise programmes to address the skills needs, the ETDP SETA developed a fi ve year Sector Skills Plan (SSP) within the framework of the National Skills Development Strategy (NSDS) III and a Five Year Strategic Plan. The SSP informs the programmes of the SETA in order to address identifi ed scarce and critical skills needs aimed at addressing national and sectoral priorities.

2.2 Organisational environmentThere were no major changes in the organisation during the period under review. The organisation’s contract management capabilities were enhanced with the establishment of a Contract Management Unit. This resulted in better contract management and monitoring, thereby improving the overall programme and project implementation effi ciency.

To address the growing importance of cost containment, the ETDP SETA decided to centralise its procurement in order to enable economies of scale and associated benefi ts. A revised procurement strategy, policies, systems and standards were developed to strengthen internal controls.

The ETDP SETA Board and its sub-committees played a vital oversight role in ensuring that the ETDP SETA has policies and systems in place to achieve the goals and objectives of the organisation. As a result most of the ETDP SETA’s policies were reviewed and approved by the Board.


2.3 Key policy developments and legislative changesDuring the year under review the following policies and regulations were published:

• Professional Qualifi cations for lecturers in Technical and Vocational Education and Training (TVET) on 11 June 2013:This necessitated the ETDP SETA to alter its strategy of registering FET lecturers on the post graduate diploma in vocational education. Instead they were registered on various PIVOTAL part qualifi cations.

• Guidelines on Grant Regulations regarding monies received by a SETA and related matters – Government Gazette No. 35940 of 03 December 2012 (amended dated 15 July 2013): The Grant Regulations increased the ETDP SETA discretionary funding while decreasing the mandatory grants to levy paying constituent organisations. This enabled the ETDP SETA to increase its targets and revise its funding model.

2.4 Strategic outcome oriented goalsThe ETDP SETA has the following strategic outcome oriented goals from its strategic plan, which are linked to its eight programmes in the APP:

Goal 1: Increasing the ETDP SETA’s capacity for skills planning and mechanisms for addressing the gap and/or mismatch between the supply of and demand for skills in the ETD sector by March 2016.

Goal 2: Strengthening the human resource base of FET Colleges by increasing the development of competent and professional lecturers and managers.

Goal 3: Improving the quality of teaching and learning in the schooling system aimed at improving learner performance.

Goal 4: Increasing new job entrants with intermediate and high level skills in ETD occupations and professions.

Goal 5: Developing young people for employability by providing workplace learning opportunities.

Goal 6: Improving the level of skills and competencies of employees in the ETDP SETA constituencies.

Goal 7: Improving the quality of provisioning of the education, training and development in the ETD sector.

Goal 8: Tightening the ETDP SETA’s internal controls and improving the organisational performance through competent leadership, management and effi cient administration.

3 Performance Information by Programme

3.1 Programme 1: Development of a credible Sector Skills PlanPurpose

The purpose of this programme was to create an institutional capacity for skills planning and mechanisms for addressing skills development needs and interventions in the ETD sector. The Sector Skills Plan for the ETD sector informed the ETDP SETA’s Strategic Plan (2011-2016) and Annual Performance Plan 2013/14.

Sub-programmes

• ETDP SETA constituencies submit quality Workplace Skills Plans/Annual Training Reports (WSPs/ATRs)• Scarce and Critical Skills Guide developed and distributed• Skills Development Facilitators (SDFs)/Sector Skills Specialists trained in the use of the guide• Learner Tracking and Tracing Study conducted• Annual Stakeholder Satisfaction Survey conducted• Impact Study conducted on the ETDP SETA’s programmes (Programmes implemented over the past three years)


Strategic objectives

• To improve the submission of the Workplace Skills Plans, Annual Training Reports, PIVOTAL plans and reports by both levy paying and non-levy paying organisations

• To disburse mandatory grants to all levy paying organisations in the ETD sector• To ensure that the research agenda and strategy as well as the skills planning systems are in place, including monitoring, evaluation

and impact assessment frameworks

Actual achievements

Programme 1: Development of a credible ETD Sector Skills Plan

Strategic ObjectivesActual Achievement

2012/13Planned Targets

2013/14Actual Achievement

2013/14

Deviation from

Planned Targets

Comments on Deviations and/or

Variances

To disburse mandatory grants to all levy paying organisations in the ETD sector

A total of 992 WSPs/ATRs were submitted

Increase rate of WSPs/ATRs submissions to 1 375

A total of 1 044 WSPs/ATRs were submitted -331

Reduction of mandatory grants affected the submission rate of WSPs/ATRs

To improve the submission of the Workplace Skills Plans, Annual Training Reports, PIVOTAL plans and reports by both levy paying and non-levy paying organisations

Scarce and Critical Skills Guide was available

Scarce and Critical Skills Guide available

Scarce and Critical Skills Guide available

- -

6 000 copies of the Scarce and Critical Skills Guides were made available for distribution

7 000 copies of the Scarce Skills Guide are distributed

3 860 copies were distributed to provincial stakeholders

-3 140

The under-achievement was due to poor attendance at workshops by stakeholders

854 SDFs/Sector Skills Specialists trained

2 000 SDFs/Sector Skills Specialists are trained in the use of the Guide

1 718 SDFs/Sector Skills Specialists trained

-282Poor attendance resulted in the under-achievement

To put in place the research agenda and strategy as well as the skills planning systems including monitoring, evaluation and impact assessment frameworks

Learner tracking and tracing study was not done

Learner tracking and tracing study in place

Learner tracking and tracing study is underway -

The project started late due to delays in concluding Research Chair agreements

Annual stakeholder survey was partly achieved

Annual Stakeholder Survey conducted and completed

Annual Stakeholder Survey Report available

- -

Evaluation of internship programme was incomplete

Evaluation Study conducted (workplace experience, internships, learnerships and apprenticeships)

Evaluation Study Report available

- -

Programme performance contribution to strategic goals

This programme assisted in understanding the gap between the demand for and supply of skills to inform planning of the skills development interventions in the ETD sector. The establishment of the Research Chairs assists the SETA in strengthening its research capacity to enhance both the quality and quantity of research output, thereby ensuring a better assessment of the skills gap.

Strategy to overcome areas of under performance

WSPs/ATRs submissions

The SETA will incentivise employers through the constituency support projects as undertaken under Programme 6. Furthermore, the campaign to educate the constituent employers about the benefi ts of submitting the WSPs/ATRs will be strengthened to ensure that the commensurate benefi ts beyond the payment of mandatory grants are better understood.


SDFs/Sector Skills Specialists trained

Armed with an improved administration system, the SETA will embark on formal identifi cation, registration and maintenance of SDFs and/or Sector Skills Specialists in the ETD sector in order to have targeted and more effective communication and participation in the programmes.

Changes to planned targets

There were no changes to the planned targets.

Linking performance with budgets

The table below provides information on sub-programme expenditure against the budget.

Sub-Programme Name

(Budget/Expenditure in R’000)

2012/13 2013/14

BudgetActual

Expenditure(Over)/Under Expenditure Budget

ActualExpenditure

(Over)/Under Expenditure

ETDP SETA Constituencies submit quality WSPs/ATRs 1 000 6 994 1 000 3 997

Scarce and Critical Skills Guide developed 486 57 429 329 - 329

Learner Tracking and Tracing Study conducted 2 795 289 2 506 1 000 0 1 000

Annual Stakeholder Satisfaction Survey conducted - - - 50 37 13

An Impact Study on the ETDP SETA programmes conducted - - - 1 000 1 246 -246

Total 4 245 352 3 979 3 379 1 286 2 093

The table below provides information on sub-programme commitments against the budget and uncommitted funds for the fi nancial year under review.

Sub-Programme Name

(Budget/Commitments in R’000)

2013/14

Budget Allocations

Commitments for 2013/14

(Over)/Under committed

ETDP SETA constituencies submit quality WSPs/ATRs 1 000 650 350

Scarce and Critical Skills Guide developed 329 179 150

Learner Tracking and Tracing Study conducted 1 000 769 231

Annual Stakeholder Satisfaction Survey conducted 50 50 -

An Impact Study on the ETDP SETA programmes conducted 1 000 1 246 -246

Total 3 379 2 894 485

3.2 Programme 2: Supporting FET institutions to be responsive to the ETD sector and national priorities

Purpose

The purpose of this programme was to enhance the capacity of the FET institutions to provide skills development in order to deliver on vocational and occupationally directed programmes in the further education and training sector.

Sub-programmes

• FET lecturers trained in PIVOTAL programmes• FET managers supported through management and leadership programmes• Lecturers supported for industry exposure and integrated learning programmes• FET lecturers trained as coaches, assessors and moderators


• FET Colleges extending the scope to offer ETD learning programmes• Students support programmes are in place in all public FET Colleges• FET Colleges registered as workplace learning sites


• To ensure competent and capable college personnel for the delivery of skills programmes• To expand the delivery mechanisms and improve delivery on PIVOTAL programmes• To improve management and leadership capacity of FET College institutions• To strengthen student liaison services in FET Colleges and enhance career development to improve career choices of students in

and around the FET Colleges

Actual achievements

Programme 2: Supporting FET institutions to be responsive to the ETD sector and national priorities



2013/14

Actual Achievement

2013/14

Deviation from

Planned Targets

Comments on Deviations and/or Variances

To ensure competent and capable college personnel for delivery of skills programmes

336 lecturers trained on National Curriculum Vocational Fundamentals (Maths, Maths Literacy and English)

300 lecturers trained on PIVOTAL programmes

356 56

There was greater demand for training by lecturers and training was done within the allocated budget

121 managers trained on Leadership and Management programmes

100 managers trained on Leadership and Management programmes (MBA/MBL/ Executive Management Development)

107 7 -

175 lecturers supported to gain industry exposure through work integrated learning (WIL)

300 lecturers supported to gain industry experience and exposure 262 -38

The shortfall was due to the lack of readily available work places for lecturer placement.

-100 FET lecturers trained as coaches, assessors and moderators

192 92Additional funding was made available to meet the high demand.

To expand the delivery mechanisms and improve the PIVOTAL programmes

-

25 FET Colleges extend their scope to deliver ETD occupational qualifi cations 10 -15

Lack of capacity in terms of material development hindered the extension of scope

-

50 FET Colleges registered as workplace learning sites

0 -50

A system for the registration of workplaces was not in place. The Workplace Registration Policy has subsequently been developed and approved by the Board

To strengthen student liaison services in FET Colleges and enhance career development to improve career choices of students in and around the FET Colleges

-

200 interns trained and placed, 4 per college for student support and career development information dissemination

200 - -

NB: The numbers reported under Actual Achievement refl ect the learners who were enrolled in the learning programmes during the year under review. However, training may still be ongoing.



The skills levels of FET College lecturers and managers were enhanced to improve the FET College system thereby responding to the national priorities. The student liaison and support services of the FET College system have been strengthened by the provision of Career Development Offi cers. This service is greatly needed to assist the youth with career choices in order to improve the supply of the identifi ed scarce skills and to reduce the rate of drop-outs caused by incorrect career choices. Information and career development services will also be accessible to students coming from the various localities around the FET Colleges.


A policy for workplace registration has been developed and approved by the Board, and a strategy for registration of workplaces is currently being developed. This is in line with the recommended best practice by the QCTO which encourages SETAs to prepare workplaces as sites for the practical component of occupational qualifi cations currently being developed.

Materials are currently being acquired for the extension of scope of FET Colleges. In addition to responding to industry needs, the project will result in FET Colleges offering a variety of programmes to the local industry and the immediate communities where they are located.





Sub-Programme Name


2012/13 2013/14

BudgetActual


ActualExpenditure


Lecturers trained on the PIVOTAL programmes 4 500 2 154 2 346 9 000 1 823 7 177

Managers capacitated on Leadership and Management programmes 2 217 389 1 828 3 000 2 422 578

Lecturers supported to gain industry experience and exposure (WIL) 3 236 837 2 399 4 500 1 245 3 255

FET lecturers trained as coaches, assessors and moderators - - - 1 000 409 591

Extension of scope for FET Colleges 1 075 429 646 - - -

FET Colleges registered as workplace learning sites for workplace experience acquisition for internship programmes

- - - 450 - 450

Placement of interns in FET Colleges and Career Development Support 7 740 4 049 3 691 14 000 14 499 -499

Total 18 768 7 858 10 910 31 950 20 398 11 552



Sub-Programme Name


2013/14

Budget Allocations



Lecturers trained on the PIVOTAL programmes 9 000 6 000 3 000

Managers capacitated on Leadership and Management programmes 3 000 2 715 285

Lecturers supported to gain industry experience and exposure (WIL) 4 500 3 738 762

FET lecturers trained as coaches, assessors and moderators 1 000 1 433 -433

FET Colleges registered as workplace learning sites for workplace experience acquisition for internship programmes 450 - 450

Career Development Support 14 000 14 000 -

Total 31 950 27 886 4 064

3.3 Programme 3: Teacher Development in support of the Integrated Strategic Planning Framework for Teacher Education and Development in South Africa

Purpose

The purpose was to develop competent and professional human resource capital for the schooling sector by supporting the Integrated Strategic Planning Framework for Teacher Education and Development in South Africa (ISPFTED-SA).

Sub-programmes

• Support for teacher capacity and practice in the delivery of subject content, pedagogy in gateway subjects (Mathematics, Physical Science, Accounting, Economics, Life Sciences and Languages in Grades 10, 11 and 12)

• Grade 10, 11 and 12 teachers trained to gain end user computing skills• Grades 7, 8 and 9 teachers capacitated in subject content methodology to improve Annual National Assessment results• Support for teachers in LSEN schools to improve learner performance• School based initial teacher education - Bachelor of Education/Post Graduate Certifi cate in Education (B.Ed/PGCE) to increase

the supply of teachers entering the teaching profession• Support and strengthen school and district management in order to promote functional schools• Support one national initiative (DBE/DHET) related to teacher development


• To support teachers with the necessary knowledge and skills to deliver gateway subjects and improve learner achievement in Grades 10, 11 and 12

• To improve the knowledge and skills of teachers and improve learners’ foundational skills in reading, writing and mathematics• To improve the skills of teachers in end user computing• To support aspiring teachers (B.Ed and PGCE) to gain work integrated learning with the support of skilled teachers and district

offi ces in partnership with DBE and Higher Education Institutions• To build the capacity of school management teams and district personnel to acquire relevant skills in school management and

leadership


Actual achievements

Programme 3: Teacher Development in support of the Integrated Strategic Planning Framework for Teacher Education and Development in South Africa

Strategic Objectives

Actual Achievement

2012/13

Planned Targets

2013/14

Actual Achievement

2013/14

Deviation from Planned

TargetsComments on Deviations and/

or Variances

To train Grades 10, 11 and 12 teachers in the delivery of subject content and pedagogy in Maths, Science, Accounting and Languages

1 960 1 000 918 - 82Western Cape reprioritised to conduct programmes for Grades 7 – 9 teachers

To train Grades 10,11 and 12 teachers in end user computing - 450 461 11 -

To train Grades 7, 8 and 9 teachers on subject content and methodology in Maths, Science and Languages in support of improving the ANA results in the senior phase for Maths, Science and English

- 900 1 018 118

Greater demand for the programme necessitated reprioritisation of Western Cape programmes which was done within available budget.

To support teachers in LSEN schools - 300 394 94

There was a high demand for the programme and more teachers were enrolled

To support B.Ed/PGCE school based initial teacher education and development

250 250 272 22There was a high demand for the programme and more teachers were enrolled

To train school and district management personnel in curriculum management and leadership programmes

850 900 905 5 -

To support one national initiative (DBE/DHET) related to teacher development 1 1 1 -

The SETA supported the DBE’s National Teaching Awards where 30 teachers were awarded bursaries



This programme contributed towards the improvement of knowledge and skills of teachers in various subjects in Grades 7 to 12, as well as management and leadership skills for school management teams, thereby improving the quality of basic education by developing a competent and professional human capital which, in turn, will lead to improved learner pass rate.


There were no underperforming projects in the year under review. It must be noted that in terms of project implementation, most of the training took place during the September and March school holidays for Programme 3. As a result of this, project expenditure is only a third of the total committed project budget.






Sub-Programme Name


2012/13 2013/14

BudgetActual


ActualExpenditure


Grades 10-12 teachers capacitated in content knowledge and pedagogy 18 666 1 843 16 823 10 000 9 154 846

Grades 10-12 teachers capacitated in end user computing - - - 9 000 924 8 076

Grades 7-9 teachers capacitated in subject content and methodology 4 823 2 074 2 749 9 000 2 827 6 173

Support for teachers in LSEN schools - - - 9 000 283 8 717

B.Ed/PGCE school based teacher training and development - new intake 4 031 937 3 094 7 500 3 399 4 101

Mentors/coaches homework support 750 - 750 - 671 -671

Support for SMT and district personnel in Management and Leadership 11 250 4 778 6 472 10 800 3 721 7 079

Support one national initiative (DBE/DHET) related to teacher development 1 000 - 1 000 900 - 900

Total 40 520 9 632 30 888 56 200 20 979 35 221


Sub-Programme Name


2013/14

Budget Allocations



Grades 10-12 teachers capacitated in content knowledge and pedagogy 10 000 9 523 477

Grades 10-12 teachers capacitated in end user computing 9 000 9 320 -320

Grades 7-9 teachers capacitated in subject content and methodology 9 000 8 309 691

Support for teachers in LSEN schools 9 000 8 600 400

B.Ed/PGCE school based teacher training and development - new intake 7 500 7 430 70

Support for SMT and District personnel in Management and Leadership 10 800 15 610 -4 810

Support one national initiative (DBE/DHET) related to teacher development 900 1 122 -222

Total 56 200 59 914 -3 714

3.4 Programme 4: Increasing access to and graduate output in Higher Education and Further Education and Training institutions

Purpose

To support students to access higher education and further education institutions in the identifi ed areas of scarce skills through ETDP SETA career development programmes and bursaries.

Sub-programmes

• Learners and students career guides revised and workers guide developed• Career guides distributed (learners, students and workers version)• Full qualifi cations (degree) – bursaries renewed annually


• Full qualifi cations (degree) – fi rst/new intake• Full qualifi cations (diploma/higher certifi cate) – fi rst/new intake• Honours – fi rst/new intake • Masters – fi rst/new intake• Doctoral Studies – fi rst/new intake• FET workplace experience• University of Technology (UoT) workplace experience• Second chance/Grade 12 re-write programme

Strategic objective

To ensure that there is an increased pool of graduates for intermediate and higher level skills in the sector.

Actual achievements

Programme 4: Increasing access to and graduate output in Higher Education and Further Education and Training institutions


Actual Achievement


2013/14

Actual Achievement

2013/14


TargetsComments on Deviations

and/ or Variances

To increase student access to Higher Education and Further Education Institutions for studies responding to identifi ed areas of scarce skills through coordinated career development programmes

Learner Career Guides developed and distributed

Learner Career Guidance handbooks revised and the student and worker guides developed.

Learner Career guidance handbook revised and distributed

Student and Worker Career Guides were not developed

Priority was placed on the Learner Career Guides based on the need

24 174 Career Guides distributed

20 000 Learner Career Guides distributed 23 305 3 305

There was a high demand that necessitated the increased distribution of the guides.

- 5 000 Worker Career Guides distributed 0 -5 000 Priority was placed on the

Learner Career Guides based on the need

- 5 000 Student Career Guides distributed 0 -5 000

To increase student access to improve output in Higher Education and Further Education institutions 824 bursaries

awarded 600 bursaries renewed

411 -189The renewals of bursaries is dependent on the academic progression of the students

96 96

There was a request for new bursaries which were funded from the bursary renewals budget

-

290 bursaries awarded through National Student Financial Aid Scheme (NSFAS)

100 -190

Documents received from NSFAS confi rmed that only 100 learners were supported

To place FET College students in workplaces to gain experience towards a qualifi cation

- 300 300 - -

To place University of Technology students in workplaces to gain experience towards a qualifi cation

- 200 226 26

More students participated in the programme within the allocated budget

To afford Grade 12 learners a second chance to write the matric examinations 1 521 1 500 1 189 -311

Of the learners that applied, only 1 189 met the set criteria for enrolling in the programme




The programme contributed to increasing student access to FET Colleges and HEIs by providing funding. It also contributed to increasing the graduate output in Higher Education and Further Education institutions by providing them with information which enabled better career choices in areas of scarce and critical skills. The programme also contributed to increasing student access in workplace learning, thereby increasing their potential for employability.

In partnership with the National Youth Development Agency (NYDA), learners who failed Grade 12 were afforded the opportunity to re-write their matriculation examinations to enable them to gain access to post school education and training, in line with the Minister’s call to expand the system.


The SETA will forge partnerships with academic support units in the FET Colleges and HE institutions to increase the students’ chances of progressing in their studies in set time.

The SETA will widen the recruitment scope for the Second Chance/Matric Re-Write learners in order to attract a greater number of qualifying applicants.


There were no changes to planed targets.



Sub-Programme Name


2012/13 2013/14

BudgetActual


ActualExpenditure


Learner Career Guide revised and Student and Worker Guides developed and printed

- - - 800 14 786

Full qualifi cations (degree) - bursaries renewed annually 6 250 14 956 -8 706 36 000 15 919 20 081

Full qualifi cations bursaries – fi rst/new intake 2 473 8 360 -5 887 16 125 17 174 -1 049

FET (workplace experience) 6 450 4 450 2 000 9 000 7 131 1 869

UoT (Workplace experience) - - - 8 400 2 758 5 642

NC(V) programmes 726 - 726 - 369 -369

NATED programmes 1 713 52 1 661 - 117 -117

Second chance/Grade 12 re-write programme 3 763 750 3 013 3 600 360 3 240

Total 21 375 28 568 -7 193 73 925 43 842 30 083



Sub-Programme Name


2013/14

Budget Allocations



Learner Career Guide revised and Student and Worker Guides developed and printed 800 383 417

Full qualifi cations (degree) - bursaries renewed annually 36 000 25 390 10 610

Full qualifi cations bursaries – fi rst/new intake 16 125 16 000 125

FET (workplace experience) 9 000 9 863 -863

UoT (workplace experience) 8 400 6 730 1 670

Second chance/Grade 12 re-write programme 3 600 3 919 -319

Total 73 925 62 285 11 640

3.5 Programme 5: Youth development through increasing access to workplace learningPurpose

The purpose of the programme was to provide the youth with workplace learning and experience in order to achieve competence in occupationally directed programmes for intermediate and high level skills.

Sub-programmes

• Internships for young people with NSC/NC(V)• Internships for graduates with diplomas/higher certifi cates• Internships for graduates with degrees• NQF Level 4 learnerships• NQF Level 5 learnerships• Unemployed graduates trained on part qualifi cations


To place unemployed youth in various forms of workplace learning programmes to enable them to gain work experience and produce work-ready graduates.

Actual achievements

Programme 5: Youth development through increasing access to workplace learning


Actual Achievement


2013/14

Actual Achievement

2013/14


TargetsComments on Deviations and/

or Variances

To place unemployed youth in various forms of workplace learning programmes to enable them to gain work experience and produce work-ready graduates

100 500 graduate internships placed 504 4

There was a greater need for internships

150 1 500 learnerships for unemployed youth 1 479 -21 Learners dropped out of the

programme

-500 unemployed graduates trained on part qualifi cations

353 -147

Not all the targeted unemployed graduates took up the offer for training as most of them had qualifi cations




The programme enabled the unemployed youth to gain work experience through various workplace based opportunities such as learnerships and internships. It also contributed to the national challenge of youth employability.


The ETDP SETA will strengthen the monitoring and support of its programmes in order to reduce the drop-out rate.


There were no changes to planned targets.



Sub-Programme Name


2012/13 2013/14

BudgetActual


ActualExpenditure


Internships 3 870 6 290 -2 420 21 600 17 320 4 280

Learnerships 22 308 39 588 -17 280 67 500 14 409 53 091

Skills Programmes - part qualifi cations - - - 5 000 419 4 581

Total 4 039 43 329 -39 290 94 100 32 148 61 952


Sub-Programme Name


2013/14

Budget Allocations



Internships 21 600 21 342 258

Learnerships 67 500 76 229 -8 729

Skills Programmes - part qualifi cations 5 000 3 627 1 373

Total 94 100 101 198 -7 098

3.6 Programme 6: Constituency support through skills developmentPurpose

The purpose was to build capacity of the ETDP SETA constituencies through skills development.

Sub-programmes

• Skills development programmes for Trade Unions• Support for Teacher Union institutes• Support for Non-Profi t Organisations (NPOs)• Support for Private Providers• Bursaries for Independent Schools• Support for Independent Schools on Leadership and Management• Skills development programmes for Political Parties• Skills Development Forum workshops for HEIs• Support for HEIs• Mentoring and coaching programmes for HEIs• Skills development support for Research Organisations• Skills development support for Library and Archives organisations


Strategic objective

To develop human and institutional capacity within the ETDP SETA constituencies through skills development.

Actual achievements

Programme 6: Constituency support through skills development


Actual Achievement

2012/13

Planned Targets

2013/14

Actual Achievement

2013/14

Deviation from

Planned Targets

Comments on Deviations and/ or Variances

To provide support to Trade Unions benefi ciaries 257 200 217 17 More benefi ciaries were trained

within the allocated budget

To provide support to Political Parties benefi ciaries 60 200 120 -80

Not all political parties took up the offer to participate in the programme

To provide support to NPOs benefi ciaries 90 200 194 -6 Some of the participants dropped

out of the programme

To provide support to Private Providers through APPETD andnon-APPETD providers

50 150 0 -150A training provider could not be secured in time to deliver the programme

To provide support to Independent Schools benefi ciaries – NAISA 30 100 103 3 -

To provide support to Independent Schools benefi ciaries on Leadership and Management

48 - - - -

To provide support to HEIs 8 23 15 -8 Not all universities took up the offer to participate in the programme

To provide support to HESA 20 1 1 - -

To provide support to HEIs SDF Forum 3 2 3 1 There was a request for an

additional workshop

To provide support to Research Organisations 2 40 30 -10

Not all research organisations were ready to participate in the programme

To provide support to SGB benefi ciaries - 100 108 8 -

To provide support to LIASA

1 50 62 12

There was a greater demand for the programme and more teachers participated in the training workshops

To provide support to Teacher Unions benefi ciaries 4 500 1 204 704

More teachers participated in the training because of the high demand and the available budget



This programme contributed to raising the skills levels of the constituent employees within the ETD sector. The ETDP SETA ensured that these constituencies were incentivised to provide training to their employees as informed by the SSP. The support provided was mainly through bursaries that were in line with the submitted WSP/ATR plans for levy-paying organisations.


The SETA will embark on a more rigorous consultative process with the constituent employers to ensure that there is a shared understanding of the programme imperatives as well as better alignment with the needs of the constituencies.



There were no changes to planned targets.



Sub-Programme Name


2012/13 2013/14

BudgetActual


ActualExpenditure


Support for Trade Unions benefi ciaries 7 350 1 333 6 017 6 000 3 915 2 085

Support for Political Parties benefi ciaries 1 298 191 1 107 3 000 441 2 559

Support for NPOs benefi ciaries 2 175 - 2 175 2 000 167 1 833

Support for Private Providers through APPETD and non-APPETD providers 1 050 806 244 3 000 33 2 967

Support for Independent Schools benefi ciaries - NAISA 3 120 17 3 103 3 000 2 057 943

Support for HEIs 7 500 30 7 470 11 500 150 11 350

Support for HESA 600 719 -119 800 1 845 -1 045

Support for HEIs SDF Forum 500 - 500 700 926 -226

Support for Research Organisations 1 688 - 1 688 2 400 755 1 645

Support for SGB benefi ciaries - - - 3 000 3 020 -20

Support for LIASA 538 - 538 1 000 92 908

Support for Teacher Unions benefi ciaries 2 500 654 1 846 4 500 2 117 2 383

Total 28 319 3 750 24 569 40 900 15 518 25 382


Sub-Programme Name


2013/14

Budget Allocations



Support for Trade Unions benefi ciaries 6 000 3 857 2 143

Support for Political Parties benefi ciaries 3 000 1 092 1 908

Support for NPOs benefi ciaries 2 000 2 307 -307

Support for Private Providers through APPETD and non-APPETD providers 3 000 975 2 025

Support for Independent Schools benefi ciaries – NAISA 3 000 3 000 -

Support for HEIs 11 500 9 410 2 090

Support for HESA 800 800 -

Support for HEIs SDF Forum 700 492 208

Support for Research Organisations 2 400 1 839 561

Support for SGB benefi ciaries 3 000 2 809 191

Support for LIASA 1 000 1000 -

Support for Teacher Unions benefi ciaries 4 500 7 234 -2 734

Total 40 900 34 815 6 085


Performance against transformation goals

The NSDS III places emphasis on the attainment of the transformation and developmental imperatives in an attempt to address the disparities of the past in our country. It calls upon all sectors to prioritise the issues pertaining to class and race, gender, rural development, age barriers, disability barriers, as well as addressing the HIV and AIDS challenges.

In order to achieve the transformation and developmental imperatives, the ETDP SETA has set equity targets which, with the exception of race and class targets, are higher than the national targets.

• Race and Class (85% black)• Gender (60% women)• Geography (60% rural)• Age (60% youth)• Disability (5%)

The table below indicates the number of benefi ciaries who participated in various ETDP SETA funded programmes as well as the breakdown in accordance with the transformation and developmental imperatives.

CategoryEquity Target

Achievement

Equity Figures 2012/13 Equity Figures 2013/14

Percentage Numbers Percentage Numbers

Female 60% 59% 5 917 66% 7 159

PWD 5% 2% 153 4% 427

Youth 60% 48% 4 838 50% 5 368

Rural 60% 48% 4 882 50% 5 342

Black 85% 96% 9 640 98% 10 591

Total Entered 10 072 10 790

The fi gures above indicate that the ETDP SETA improved its performance in all areas in relation to its equity targets from the 2012/13 to the 2013/14 fi nancial years. It is important to note that the organisation has doubled the support for people living with disabilities. The ETDP SETA will continue to strive to achieve its internally set target of 5% on supporting people living with disabilities.

3.7 Programme 7: Strengthening the quality assurance system and improving monitoring and evaluation impact

Purpose

The purpose of this programme was to ensure effective and effi cient systems for quality provisioning of skills development, credit bearing programmes for the ETD sector and ETDP SETA constituencies.

Sub-programmes

• Review of policies• Service Level Agreements (SLA) with QCTO as an Assessment Quality Partner (AQP) and setting up of assessment centres• Materials developed for occupational qualifi cations• Applications for accreditation and extension of scope for new/emerging providers• Occupational qualifi cations developed and completed• Learners who complete programmes to receive certifi cates• Training providers verifi ed (all applications received and processed within the set timeframes)• Learners to pilot Recognition of Prior Learning (RPL) (ComDev and ECD Programmes)• RPL centres set up• Learning programmes evaluated (all applications received and processed within the set timeframes)• The ETDP SETA supports the DHET’s Adult Basic Education and Training (ABET) sub-sector re-engineering



• To improve quality assurance services that are compliant with legislation• To facilitate the identifi cation and development of relevant credit bearing skills programmes and qualifi cations for occupations in

the ETD sector and SETA constituencies• To ensure accreditation of providers and extension of scope• To provide quality assurance and monitor the provision of ETDP SETA credit bearing skills programmes and qualifi cations• To implement the RPL assessment projects

Actual achievements

Programme 7: Strengthening the quality assurancesystem and improving monitoring and evaluation impact



2013/14

Actual Achievement

2013/14

Deviation from

Planned Targets


Variances

To ensure the DQP strategy in place

2 policies developed in line with SAQA requirements

3 policies in line with QCTO requirements 3 - -

To ensure the development of nationally standardised assessments

-

SLA with QCTO as AQP and setting up of assessment centres

SLA as AQP with QCTO is in place -

Assessment centres not yet established

To develop materials for occupational qualifi cations -

4 sets of materials developed for occupational qualifi cations

0 -4

4 completed occupational qualifi cations submitted to the QCTO but not yet registered

To ensure accreditation/ extension of scope

194 training providers accredited

100% of applications of new and/or emerging providers’ applications for accreditation or extension of scope are ratifi ed

268 applications received and ratifi ed - -

To ensure that registered occupational qualifi cations are in place

0 occupational qualifi cations developed

5 occupational qualifi cations developed and completed 4 -1

The last of the 5 qualifi cations is currently being developed

To process 100% of learner verifi cation applications

12 801 learners certifi cated against full qualifi cations

49 465 learners certifi cated against unit standards

100% of learners who complete programmes to receive certifi cates

13 598 learners certifi cated on full qualifi cations

61 215 learners endorsed on Unit Standards based programmes

- -

To verify 100% of providers who submit applications for verifi cation

580 providers were verifi ed

100% of providers’ applications received for verifi cation are processed

465 applications received and processed - -

To ensure that the approved RPL strategy is in place

2 community development occupational qualifi cations developed

200 learners to pilot RPL (ComDev and ECD programmes)

Research commissioned to profi le the learners for the RPL project

-

Learners to be placed once research outcomes are implemented

To establish 2 RPL centres

2 community development occupational qualifi cations developed

2 RPL centres are established

2 -

MoUs with 2 FET Colleges: Orbit (in NW) and Umgungundlovu (in KZN) are in place


Programme 7: Strengthening the quality assurancesystem and improving monitoring and evaluation impact



2013/14

Actual Achievement

2013/14

Deviation from

Planned Targets


Variances

To process applications for accreditation, extension of scope and learning programmes

120 learning programmes approved

100% of applications received are processed

277 applications received and processed - -

To support the re-engineering of the ABET sub-sector through the ETDP SETA participation at national level

-

The ETDP SETA supports the DHET’s ABET sub-sector re-engineering

Research on the establishment of community centres currently underway

-

Research outcome will inform the type of support needed


The ETDP SETA has, for the fi rst time, developed occupational qualifi cations in consultation with key stakeholders and in accordance with the QCTO framework. The SETA has positioned itself as an Assessment Quality Partner (AQP) for the qualifi cations and their associated part qualifi cations.


Once the occupational qualifi cations have been approved by the QCTO, the ETDP SETA will develop the materials.



Linking performance with budget


Sub-Programme Name


2012/13 2013/14

BudgetActual

ExpenditureOver /Under Expenditure Budget

ActualExpenditure

Over /Under Expenditure

Strengthening of quality assurance and improving monitoring and evaluation for impact 645 2 268 -1 623 3 575 297 3 278

Consultative workshops 326 - 326 - - -

Occupational qualifi cations developed and completed - - - 720 769 -49

RPL Centres set up 538 - 538 2 891 126 2 765

The ETDP SETA supports the DHET’s ABET sub-sector re-engineering - - - 806 - 806

Total 1 509 2 268 -759 7 992 1 192 6 800



Sub-Programme Name


2013/14

Budget Allocations



Review of policies - - -

Strengthening of quality assurance and improving monitoring and evaluation for impact 3 575 2 383 1 192

Support for TVET OECD Ministerial Review Project - 3 000 -3 000

Occupational qualifi cations developed and completed 720 824 -104

Learners to pilot RPL (ComDev and ECD programmes) - - -

RPL Centres set up 2 891 1 000 1 891

The ETDP SETA support for the DHET’s ABET sub-sector re-engineering 806 206 600

Total 7 992 7 413 579

NB: The ETDP SETA took a strategic decision to support the Review of the TVET College System in partnership with DHET. To this end R3 million was committed.

3.8 Programme 8: Improving organisational administration and management to enhance organisational performance

Purpose

The purpose of the programme was to improve organisational performance through effective and effi cient leadership and management.

Sub-programmes

• Implementation of the SETA integrated organisational development and performance strategy• Capacity building of governance structure members• Increased profi ling of the ETDP SETA• Implementation of an integrated Management Information System• Annual update of the SSP informed by in-depth research and analysis of the ETD sector• Establishment of Research Chairs


• To develop an integrated organisational development and performance strategy• To ensure effective and effi cient governance through training for governance structures• To revise media and public relations strategy• To improve supply chain management practices• To improve fi nancial management practices• To ensure that an integrated Management Information System (MIS) supports and improves effi ciency• To annually update the SSP, informed by in-depth research and analysis of the ETD sector


Actual achievements





2013/14


Targets

Comments on Deviations

and/or Variances

To develop an organisational development and performance strategy

Strategy, structure and performance management system in place for organisational effectiveness

Improved organisational performance

Employee satisfaction levels improved

Developed draft HR Strategy to leverage performance and staff satisfaction levels

- -

-

Organogram to support the strategy developed, adopted and put in place

Reviewed and approved organogram

- -

28 employees were supported on training and development programmes

Staff is awarded bursaries for in-service training, career development and self-improvement

74 employees supported through skills programmes and bursaries

- -

To ensure effective and effi cient governance

The 2012 Annual General Meeting (AGM) was held on 30 October 2012.

Annual General Meeting to take place.

The 9th Annual General Meeting was held on 21 October 2013

- -

All 5 ETDP SETA Chambers had a total of four meetings each, in 2012/13.

Quarterly meetings of Chambers took place

A total of four chamber meetings took place as planned - -

Capacity building programme implemented for Chambers to improve organisational effectiveness

Capacity building of Governance Structure members

15 Board members trained on Integrated Reporting and Corporate Governance

3 EXCO members trained on Analysis of Financial Statements

70 Chamber members trained on Governance and Monitoring and Evaluation

5 Audit and Finance Committee Members trained on Risk Management

- -

To review media and public relations strategy (internal and external)

The SETA increased its visibility through events which included the hosting of its 5th biennial conference, ECD dialogue, road shows and participating in career exhibitions

Profi ling of ETDP SETA is increased through 25 exhibitions, 12 road shows, print and electronic media

6 Provincial Offi ces were launched: Free State, Gauteng, Mpumalanga, North West, Northern Cape and Western Cape

45 career exhibitions were held

Career Development Project was launched

Advertorials placed in different publications to profi le the ETDP SETA

Interviews on TV and radio coverage was broadly used to profi le the organisation

- -






2013/14


Targets

Comments on Deviations

and/or Variances

To improve Supply Chain Management practices

The Supply Chain Management Policy was revised and approved by the Board in May 2012

Reviewed Supply Chain Management Policy in place

The Supply Chain Management Policy was reviewed and approved by the Board - -

To improve Financial Management practices

The SETA received a clean audit report which demonstrates effectiveness and effi ciency

Unqualifi ed 2013/14 audit

Unqualifi ed audit

- -

To ensure an integrated Management Information System (MIS) that supports and improves the effi ciency and the effectiveness of the organisation

Automated system fully functional in the Operations, ETQA, Finance and HR Divisions hence no material fi ndings by the Auditor-General

Integrated MIS for service delivery

An enhanced core administration system is being implemented

- -

To ensure that a credible SSP is in place informed by in-depth research and analysis of the ETD sector

Research conducted for 12 constituencies. The SSP was submitted to DHET on 30 November 2012

An updated Sector Skills Plan

Updated SSP was approved by the Board and submitted to DHET

- -

Baseline sector profi les are available.

Sector profi les are available for the following:

ECD (5)

Schooling (2)

FET Colleges (7)

Partnership Agreements for identifi ed research projects in place

Partnership Agreements for four constituencies in place and four SSP constituency reports available

- -

None 3 Research Chairs to be established in three universities

4 Research Chairs established in four universities

1

Board approved additional funding to establish four Research Chairs


Linking performance with the budget

Sub-Programme Name


2012/13 2013/14

BudgetActual


ActualExpenditure


Integrated organisational development 500 - 500 500 251 249

Employees supported through skills programmes and bursaries 1 766 1 360 406 1 680 865 815

Capacity building of governance structure members 500 138 362 1 000 705 295

Profi ling of ETDP SETA through 25 exhibitions, 12 road shows, print and electronic media 3 500 3 500 - 3 019 3 499 -480

Integrated Management Information System (MIS) 3 000 - 3 000 3 000 1 597 1 403

Update of SSP 3 225 2 508 717 - - -

Research chairs established 2 741 - 2 741 2 700 1 582 1 118

Total 15 232 7 506 7 726 11 899 8 499 3 400


3.9 Overview of Provincial Performance3.9.1 Eastern Cape

Mr Luvo Gazi – Provincial Manager

The Eastern Cape province has contributed towards the ETDP SETA Strategic Plan 2011-2016 by ensuring that young unemployed people who have completed their studies are given an opportunity to get one year’s experience in the workplace. As a result of this, 62 learners benefi tted from our internship programme.

Similarly, with regard to the workplace experience which targets the FET Colleges and University of Technology students who require workplace experiential learning, 74 students benefi tted from the programme enabling them to obtain their full qualifi cations. The Eastern Cape province embarked on a programme to ensure that dedicated groups such as the disabled, rural, black and women benefi tted from the programmes on offer by the ETDP SETA.

3.9.1.1 Programme 1: Development of a credible Sector Skills Plan

Sub-programmesPlanned Targets


2013/14Deviation fromPlanned Target

SDFs/Sector Specialists trained in the use of the guide 200 147 - 53

Scarce and Critical Skills Guides distributed 1 000 164 -836

WSPs/ATRs submitted 131 92 -39

3.9.1.2 Programme 2: Supporting FET institutions to be responsive to the ETD sector and national priorities




FET lecturers trained on NCV Fundamentals 39 38 -1

FET managers trained on the Leadership and Management programme 16 16 -

FET lecturers supported to gain industry exposure 60 50 -10


3.9.1.3 Programme 3: Teacher development in support of the Integrated Strategic Planning Framework for Teacher Education and Development in South Africa

Sub-programmes Planned Targets2013/14

Actual Achievement

2013/14

Deviation fromPlanned Target

Grade 10-12 teachers capacitated in content knowledge and methodology 120 122 2

Grade 10-12 teachers capacitated in end user computing 50 50 -

Grade 7-9 teachers capacitated in subject content and methodology 100 97 -3

LSEN teachers supported 33 45 12

B.Ed school based teachers trained 34 34 34

SMT to be trained on Leadership and Management 140 138 -2

3.9.1.4 Programme 4: Increasing student access to and graduate output in Higher Education and Further Education and Training institutions


2013/14

Actual Achievement

2013/14


Career Guides distributed 2 500 2 660 160

Bursaries renewed 130 82 48

New bursaries awarded 13

FET students supported to gain workplace experience 33 33 -

UoT students supported to gain workplace experience 40 41 1

Learners entered on second chance matric re-write 168 216 48

3.9.1.5 Programme 5: Youth development through increasing and supporting access to workplace learning


2013/14

Actual Achievement

2013/14


Young people assisted to get into internship programmes 63 62 -1

Unemployed youth trained on Learnerships 175 175 -

Unemployed graduates trained on part qualifi cations 55 55 -

3.9.1.6 Stakeholder management

The relationship between the province and the various stakeholders have been highlighted in this report. During the fi nancial year under review, the following stakeholders interacted with the province:

• HEIs• FET Colleges and UoTs• Provincial DBE• ECD organisations and forums• EPWP stakeholders• SDF forum


3.9.2 Free State

Ms Felicity Scully – Provincial Manager

The Free State province has not deviated substantially in most of the skills development indicators from the national landscape. There are still high levels of youth unemployment and a disjuncture between the demand and the supply of skills within the province.

The analysis of the provincial WSPs indicated clearly the scarce and critical skills needed in the province. Within the ETD sector, the need for Grade R and ECD practitioners is still evident. The improvement in provincial matric results was a refl ection of the hard work and planning from the Provincial Department of Education. In the 2013 fi nal examinations, the Free State matric pupils achieved the highest results nationally. The commitment to the improvement of matric results and the partnerships formed to improve performance, have paid off over the past years and will continue in the future.

The province has four FET Colleges and supports the SDFs through the provincial SDF forum. The province supported the FET colleges through the WIL, PIVOTAL programmes and bursaries. The support and training of Career Development Offi cers in each of the FET Colleges has received provincial support, and the long term programme received appreciation from the FETs.

The province supported many undergraduates through a partnership with the Premier’s Offi ce and through the support of students in teacher training. The province implemented a substantial support programme for the youth through ECD Learnerships, bursaries and workplace experience (WPE) programmes.

The partnership with the provincial DoE, is in its third year and has seen positive outcomes. The matric results and the improvement in the overall Mathematics performance in the province are as a result of this partnership. The province implemented Leadership and Management, Mathematics and Accountancy programmes and other key programmes as an overall improvement of the teacher output strategy.

Although there were minor delays in some areas in the implementation of the programmes, the stakeholders of the ETD sector in the Free State Province, had a positive experience during the fi nancial year.





WSPs/ATRs submitted 60 28 -32

Scarce and Critical Skills Guides distributed 500 323 -171

SDFs trained in the use of the Scarce and Critical Skills Guide 200 3 -197





FET lecturers trained in PIVOTAL programmes 33 30 -3

FET managers trained in Leadership and Management 8 7 -1

Lecturers supported to gain industry experience 30 23 -7





FET lecturers trained as assessors and moderators 20 54 34





Grades 10-12 capacitated in content knowledge and methodology 60 69 9

Grades 10-12 teachers capacitated in end user computing 50 50 -

Grades 7-9 teachers capacitated in content knowledge and methodology 100 136 36

Teachers supported in LSEN schools 33 45 12

SMT supported in leadership programmes 80 82 2

Undergraduates supported to complete B.Ed through bursaries 20 90 70





Career Guides distributed in the province 3 300 2 013 -1 287

Bursaries renewed 60 56 -4

Learners supported to gain workplace experience in the FET 33 33 -

3.9.2.5 Programme 5: Youth Development through increasing and supporting access to workplace learning




Interns entering the workplace 1 1 -

Learners entered in ECD Level 4 110 110 -

Learners entered in ECD Level 5 60 60 -


The following encompasses the scope of the ETDP SETA constituencies in the Free State:

• Departments of Basic Education (national and provincial)• Department of Higher Education and Training • Higher Education Institutions (public and private)• Further Education and Training Colleges (public and private)• Non-Governmental Organisations (NGOs) and Community-based Organisations (CBOs)• National Independent Schools• School Governing Bodies (SGBs) as employers• Political Parties as Employers• Trade Unions/Associations as employers• Library, Information and Archives South Africa as employers• Research Organisations• Early Childhood Centres and Institutions

- Adult Centres and Institutions - Private Providers


3.9.3 Gauteng

Mr Gerrard Francis – Provincial Manager

The country is confronted with massive skills shortages and a mismatch between training outputs and skills needs of a transforming economy. The Gauteng province is not immune to this phenomenon. This has been compounded by a huge infl ux of people into the province and the constant improvement of matric results and the need for fi nancial resources for the learners.

Despite the aforementioned, we have successfully implemented a number of skills development interventions in the delivery of the SETA mandate, details of which are outlined in the content of this report. We have been able to achieve most of the targets allocated to the province, placement and employment has remained a huge challenge. The province, however, continues to engage with the employers to encourage them to open workplaces as centres of learning and excellence for unemployed youth who desperately require experiential learning in order to increase their chances of employment.

We continue to face challenges in respect to the participation of small and micro enterprises that constitute a huge number of ETD employers in the province. This is evident in the low submission rates of the Annual Training Reports (ATRs) and Workplace Skills Plans (WSPs).



2013/14

Actual Achievement

2013/14


WSPs/ATRs were submitted 885 434 -451

Training of SDF/Sector specialists on the Scarce and Critical Skills Guide 300 350 50

Distribution of the Scarce and Critical Skills Guides 1 000 935 -65



2013/14

Actual Achievement

2013/14


Lecturers trained on National Curriculum Vocational Fundamentals (Maths and Maths Literacy) 36 58 22

Managers trained on Leadership and Management programmes 16 16 -

Lecturers were supported to gain industry exposure through work integrated learning and programmes 40 30 -10

FET lecturers trained as assessors and moderators 20 39 19




2013/14

Actual Achievement

2013/14

Deviation from

Planned Target

Teachers trained from the FET Phase in Mathematics, Life Sciences, Physical Science, Accountancy, Economics and Geography 120 124 4

Grade 10 – 12 teachers capacitated in end user computing Learnership 50 50 -

Teachers trained from the GETC Phase in Mathematics, Life Sciences, Physical Science and Languages 100 89 -11

LSEN teachers capacitated to teach Sign Language and Braille 33 66 33

New bursaries to be entered 27 27 -

SMT and District Offi cials to be trained in Leadership and Management 100 182 82



2013/14

Actual Achievement

2013/14


Career Guides to be distributed in the province 2 500 4 175 1 675

Bursaries renewed 31 31 -

New bursaries awarded 26 -

FET students supported 36 43 7

University of Technologies supported 40 76 36

Learners entered on second chance matric re-write 200 166 34

3.9.3.5 Programme 5: Youth development through increasing access to workplace learning


2013/14

Actual Achievement

2013/14


Unemployed graduates placed with institutions 26 26 -

Learnerships for unemployed youth 165 165 -

Skills programmes for unemployed youth implemented 32 32 -


The Gauteng province engaged its stakeholders in the province to facilitate skills development within the province, which are:

• FET Forum meetings• WSP/ATR mobilisation workshops• Meeting with the Gauteng Department of Education and its associated bodies; the Gauteng City Region Academy, and Matthew

Goniwe School of Leadership and Governance• The Higher Education Institutes• The National Association of School Governing Bodies• Private Providers


3.9.4 KwaZulu–Natal

Ms Zandile Ntshangase – Provincial Man-ager

The province performed well during the fi nancial year under review, with concerted efforts taken to ensure implementation of programmes in rural and poor-performing districts in the province.

The highlights of the year under review were on specifi c programmes that were implemented in partnership with key stakeholders and constituencies who deal directly with skills matters.

It includes the following programme, namely, under Programme 5: “Youth Development for employability”, the province partnered with the Provincial Department of Education by supporting their volunteers who provide support in literacy development in the schooling sector. One hundred and eleven reading mentors were placed in schools to provide teacher support by reading to learners and assisting with homework.

In response to ensuring that FETs evolve into community colleges, the SETA continued to support the Career Development Offi cers in all nine FET colleges in the province. The programme also addressed the needs of the learners and provided information and advice to communities who are predominantly based in rural areas. The scope of the programme was extended to include other SETAs and utilising the Career Development Offi cers to benefi t the community as well as different industries. The success of the programme was evident from the number of offi cers that were employed by private industries and absorbed in FET Colleges.



2013/14

Actual Achievement

2013/14


SDFs/Sector specialists trained on the Scarce and Critical Skills Guide 250 260 10

Distribution of the Scarce and Critical Skills Guides 670 348 -322



2013/14

Actual Achievement

2013/14


To ensure competent and capable college personnel for delivery of skills programmes 66 56 10

Managers capacitated on Leadership and Management programmes 12 12 -

Lecturers supported to gain industry exposure through work integrated learning and programmes 40 41 1




2013/14

Actual Achievement

2013/14


Grades 10-12 teachers trained in Mathematics, Life Sciences and Physical Science 120 148 28

Grades 10-12 teachers capacitated in end user computing Learnerships 50 50 -

Grades 7-9 teachers trained from the GETC Phase in Mathematics, Life Sciences, Physical Science and Languages 125 141 16

LSEN School teachers capacitated to teach Sign Language and Braille 33 - 33

SMT and District Offi cials trained in Leadership and Management 140 33 107



2013/14

Actual Achievement

2013/14


Career guides distributed through partnerships 3 330 1 025 2 305

Students bursaries renewed 54 43 11

Expand the delivery mechanisms and improve the PIVOTAL programmes 17

FET students supported in WPE 33 33 -

UoT students supported in WPE 40 40 -

Support Second Chance/Grade 12 students to re-write matric 200 73 127



2013/14

Actual Achievement

2013/14


Interns placed with various organisations 23 23 -

Learners placed in Library Practice Learnerships and 50 ECD L5 Learner-ships supported for the 2nd year 165 165 -

Skills programmes for disabled learners implemented 50 - -50


A number of providers were assisted with the process of accreditation which involved the initial consultation on the requirements for accreditation, through to the application stage and resulting in provisional accreditation being awarded. Walk-ins were seen to and their concerns addressed, while assistance via the telephone and emails were given on a daily basis. This included providing advice on the requirements for accreditation, quality management systems and learning material. Often referrals were made to various other SETAs.

Amongst the providers assisted were service providers who could not be accredited in previous years. The province recorded 19 new accredited providers and 25 approvals for re-accreditation. The province also participated in the Provincial Training Committee and included amongst others, the ECD forum and the FET SDF forum.


3.9.5 Limpopo

Mr Isaia Mphaphuli – Provincial Manager

The Annual Performance Plan for the year under review was the vehicle through which the Limpopo Provincial Offi ce used to contribute towards the achievement of the ETDP SETA targets at national level. In promoting and facilitating the development and improvement of skills profi les in Limpopo province, we did so operating within the frameworks provided by applicable National Legislations, National Policy Frameworks and Internal ETDP SETA Policy Guidelines.

The province partnered with its stakeholders to implement all the projects and their successful implementation was made possible by their continued support and cooperation which is greatly appreciated.

The province experienced some challenges during the period under review. There were cases where employers delayed in the recruitment of benefi ciaries to the programme. One of the strategies adopted was to request employers to declare their willingness to participate in the programmes with confi rmed dates of training. The benefi ciaries were also required to declare their interest in participating in the programmes, which helped to reduce the dropout rates.



2013/14

Actual Achievement

2013/14


SDFs/sector specialists receive training in the use of the Scarce and Critical Skills Guides 200 346 146

Scarce and Critical Skills Guides distributed 400 346 -54

ETDP SETA levy paying organisations submit WSPs and ATRs by the 30th June 2013 74 30 -44

3.9.5.2 Programme 2: Supporting FET institutions to be responsive to the ETD sector and national comments


2013/14

Actual Achievement

2013/14


Lecturers trained in PIVOTAL Programmes 33 33 -

FET Managers trained in Advanced Leadership and Management programme 14 24 10

Workplace exposure of lecturers in industry (WIL) 44 18 -26

FET lecturers trained as coaches, assessors and moderators 20 38 18




2013/14

Actual Achievement

2013/14


Grade 10 – 12 teachers trained in subject content and methodology in Maths, Science and Languages. 120 139 19

Grades 10-12 teachers capacitated in end user computing Learnership 50 50 -

Grades 7-9 teachers capacitated in subject content and methodology in Maths, Science and Languages 102 112 10

Support capacity of teachers in LSEN schools in the use of Braille and interpretation of SA Sign Language. 33 66 33



Actual Achievement

2013/14


Career Guides are distributed 3 300 3 548 248

Renewal of bursaries 13 12 1

Bursaries awarded to fi rst year students 11 -

FET Colleges learners supported through workplace experience programme 33 33 1

Second Chance/Grade 12 re-write learners supported 168 172 4



2013/14

Actual Achievement

2013/14


Learners placed in internships 307 286 -21

Learners placed on Learnerships 110 117 7

Learners placed on Youth Development Learnership L4 55 27 28

Unemployed graduates trained in part qualifi cations 305 158 -147


During the period under review, the offi ce continued to maintain established relationships with different stakeholders. The province established partnerships with stakeholders and social partners in the implementation of its programmes. These partnerships have led to the support of disabled learners by enrolling them into International Computer Drivers Licence Programme (ICDL) and Youth Development Learnership.

The Limpopo offi ce has been able, for the period under review, to manage relationships with its constituencies through participation in exhibitions, engagements through the ETDP SETA Consultative forum, and participation in various provincial structures such as Provincial Skills Development Forum, Provincial Youth Development Committee and Limpopo Human Resources Development Strategy Unit attached to the Limpopo Premier’s Offi ce.


3.9.6 Mpumalanga

Ms Ntombi Mxenge - Provincial Manager

The Provincial Offi ce was offi cially opened in September 2013. Mpumalanga, like other provinces, has a shortage of Mathematics and Science teachers. The ETDP SETA is funding 100 young people to study towards a B.Ed degree to help alleviate the problem.

Unemployed youth with disabilities are placed in workplaces and are enrolled for Learnerships.

The WIL programme, targeting college lecturers, has seen them being exposed to industries that are relevant to the vocational training that they offer at their respective colleges. The approach to the training interventions for educators was to analyse the matriculation results for the past three years. Through this, the relevant offi ces were able to identify a trend in terms of problematic topics in which the learners experienced diffi culties. As a result thereof, the course content was tailored to address the identifi ed areas.

The province experienced some challenges. These were in the areas of recruiting learners, benefi ciaries that did not bring all the required documents, the replacement of learners by the Department, and the reluctance of some employers to host learners and interns with disabilities.



2013/14

Actual Achievement

2013/14


Distribution of the Scarce and Critical Skills Guide 500 239 -261

Submission of quality WSPs/ATRs 70 34 -36

SDFs / Sector skills Specialists trained in the use of the Scarce and Critical Skills Guides 200 183 -17



2013/14

Actual Achievement

2013/14


FET senior management personnel trained in Leadership and Management (MBA/MBL/Executive Management Development) 6 6 -

FET lecturers supported to gain industry exposure (WIL) 40 39 -1

Interns placed in FET Colleges as Career Development Offi cers 12 12 -




2013/14

Actual Achievement

2013/14


Improved Grade 10-12 teacher capacity and practices in the FET phase in Mathematics, Physical Science and Accounting 100 96 -4

Improved skills of SMT in Curriculum Management and Leadership 250 215 -35

Improved teacher capacity and practices in the senior phase in Maths, Natural Science and Languages 125 129 4

Number of teachers from LSEN schools capacitated 33 24 -9

Improved teacher performance in end user computing 50 50 -

Number of students awarded bursaries to access under- and post-graduate studies 100 100 -



2013/14

Actual Achievement

2013/14


Collaborate with stakeholders to disseminate the Career Guides 3 330 1 625 -1 705

Number of students awarded bursaries to access under- and post-graduate studies 8 -

Number of students who had their bursaries renewed 99 91 -8

Number of FETs/UoTs students supported to gain workplace experience 33 33 -



2013/14

Actual Achievement

2013/14


Number of unemployed youth placed on internship programmes 16 16 0

Number of unemployed youth registered for Learnerships 165 165 -

Number of youth placed in second chance/matric re-write programme 168 33 -135


The province is in regular contact with constituent members. Regular meetings are held to discuss programmes of common interest. Some constituent members are assisted with the accreditation and/or evaluation of their programmes. Meetings are held on a quarterly basis with the Provincial Skills Development Committee (PSDC) which is coordinated by the Provincial Department of Education. The PSDC has established a Mathematics and Science Steering Committee for which the ETDP SETA Provincial Coordinator is the convener. The ETDP SETA, together with the Department of Education established project management committees to coordinate the implementation of all the programmes in Programme 3.

Having noted that the province is struggling to attract people with disabilities, bilateral engagements were initiated with various stakeholders. This resulted in the recruitment of eighty unemployed youth with disabilities to participate in Learnerships and an internship programme.

A stakeholder forum was established which is composed of all the constituent members that are based in the province. The structure is briefed on the activities of the SETA as well as the programme allocation for the province. The structure also plays the role of being the advisory body to our provincial offi ce. The meetings are held with the structure on a quarterly basis.


3.9.7 Northern Cape

Mr Rama Kistiah – Provincial Manager

The Northern Cape Provincial Offi ce is pleased to report on the achievements of the ETDP SETA for the 2013/14 fi nancial year. With the physical presence of the ETDP SETA in Kimberley, the provincial offi ce was able to engage closely with the Education Training and Development stakeholders in the province.

The ETDP SETA participated in all relevant skills development initiatives in the province. The provincial offi ce has established relationships with stakeholders across the province, and is one of the SETAs that has implemented programmes across the Northern Cape including deep rural areas.

There were numerous walk-ins to the offi ce and the provincial staff was able to assist stakeholders effi ciently. Stakeholders have commended the ETDP SETA on their commitment to develop the skills for the people of the Northern Cape.

The provincial offi ce has been able to achieve most of the targets allocated to them. The provincial team has worked hard in ensuring that our targets are met while maintaining good relations with stakeholders.



2013/14

Actual Achievement

2013/14

Deviation from

Planned Target

SDFs/Sector Skills Specialists trained in the use of the guide. 200 225 25

Distribution of Scarce and Critical Skills Guides 500 225 -275

3.9.7.2 Programme 2: Supporting FET institutions to be responsive to ETD sector and national priorities


2013/14

Actual Achievement

2013/14


FET lecturers trained in relevant PIVOTAL programmes 33 47 14

FET managers trained in Leadership and Management 4 4 -

FET lecturers supported to gain industry exposure (WIL) 30 30 -




Actual Achievement

2013/14


Grades 10-12 teachers capacitated in content knowledge and pedagogy 120 80 -40

Grade 10-12 teachers capacitated in end user computing 50 61 11

Grades 7-9 teachers trained on subject content and methodology 100 92 -8

Support for teachers in LSEN schools 33 33 -

Support and strengthen school and district management in order to promote functional schools 80 103 23



Actual Achievement

2013/14


Career Guides distributed 3 330 3 340 10

Full qualifi cations bursaries - renewed 9 10 1

Full qualifi cations bursaries - fi rst/new intake 11 -

FET (workplace experience) 33 33 -

Learners placed on second chance programme 166 228 62



Actual Achievement

2013/14


Young people placed on internships 5 5 -

Unemployed youth placed in learnerships 165 165 -

Training of unemployed graduates in part qualifi cations - 53 53


The Northern Cape Provincial team engaged with its stakeholders on a continuous basis. A register of visitors was kept with the type of queries that they approached the offi ce with. The Provincial Offi ce participated effectively on the relevant skills development structures.

The Province fully participates in relevant forums including:

• The Provincial Human Resource Development Forum• The Provincial Skills Development Forum• The Inter-SETA Forum• The Northern Cape Teacher Development Forum• Northern Cape ECD ForumThe ETDP SETA launched its Provincial Offi ce in October 2013. This event was well attended by Provincial ETD stakeholders who complimented the SETA for the good work that was being done. The Provincial Offi ce participates in all skills developments forums and committees.


3.9.8 North West

Ms Sibongile Nhlabathi – Provincial Manager

The country is confronted with skills shortages and a mismatch between training outputs and skills needs for a transforming economy. The North West province is not immune to this phenomenon. The Provincial Offi ce has successfully implemented a number of skills development interventions in the delivery of the ETDP SETA mandate and the details are outlined this report.

The North West Provincial Offi ce has been able to achieve most of the targets allocated to the province.

In line with the Annual Performance Plan 2013/14, the North West Offi ce was mandated to implement the programmes and Sub-programmes indicated below in an attempt to address challenges facing the province and the country at large. Detailed statistics are provided below.



Actual Achievement

2013/14


Training of SDFs in the use of the Scarce and Critical Skills Guides 200 204 4

Organisations mobilised to submit WSPs/ATRs 50 49 -1

Scarce and Critical Skills Guides are disseminated through partnerships 500 380 -120



Actual Achievement

2013/14


Lecturers trained on the PIVOTAL programmes 33 45 12

Managers capacitated on Leadership and Management programmes 6 19 13

Lecturers supported to gain industry experience and exposure (WIL) 46 31 -15

FET lecturers trained as coaches, assessors and moderators 20 20 -



Actual Achievement

2013/14


Grade 12 teachers capacitated in content knowledge and pedagogy 120 137 17

Grade 10-12 teachers capacitated in end user computing 50 50 -

Grade 7-9 teachers capacitated in subject content and methodology 100 111 11

Support for teachers in LSEN school (Sign Language) 36 31 -5

Support for SMTs and District personnel in Management and Leadership 100 152 52



Actual Achievement

2013/14


Teacher assistants to be provided with 2nd year bursaries for a B.Ed Foundation Phase Degree 28 2 -26



Actual Achievement

2013/14


Learner Career Guides distributed to schools 3 300 2 573 -727

Full qualifi cations (degree) - bursaries renewed 34 30 -4

Full qualifi cations bursaries - fi rst/new intake 10 -

FET students supported (workplace experience) 26 26 -

UoT students supported (workplace experience) 7 7 -

Learners supported Second Chance/Grade 12 re-write programme 171 171 -



Actual Achievement

2013/14


Internships for young people implemented 55 55 -

Unemployed youth placed in learnerships: 165 165 -

Training of unemployed graduates in part qualifi cations 55 55 -


In the 2013/14 fi nancial year, partnership agreements were signed between the ETDP SETA and respective Principals of the following constituencies and stakeholders:

• North West Department of Education• Taletso FET College• Orbit FET College• Vuselela FET College• North West University (all three campuses)• Independent Schools in the province• Private Providers of Education and Training Institutions in the province

The North West Provincial Offi ce has enhanced and solidifi ed relations with a variety of stakeholders, leading to a successful offi cial opening/launch of the Provincial Offi ce on 17 September 2013. This was attended by various stakeholders who extended their messages of appreciation and support in respect of the work done by the ETDP SETA in the province.


3.9.9 Western Cape

Mr Ismael Adams – Provincial Manager

The Western Cape Provincial Offi ce has, in line with its Head Offi ce, crafted a single strategy with eight programmes that link to the work in the province. It has various stakeholders and partners, inclusive of the Western Cape Education Department (WCED), which consistently supports teacher development in the province.

In the FET sector, the ETDP SETA supported the training of 12 FET managers on Leadership and Management (MBA/MBL programmes), FET lecturer training in Mathematics and Mathematical Literacy, continuation and improved funding of graduates as Career Development Offi cers in all six FET Colleges, and assessor training of lecturers. Five of the six FET Colleges provided training to unemployed learners on ECD Levels 4 and Level 5 qualifi cations. This supports the Minister of Higher Education and Training’s vision to make FET Colleges institutions of choice for further study for school leavers thereby establishing FET Colleges as institutions of quality training.

The Western Cape Provincial Offi ce continued to fi nancially support teacher assistants to enrol for the B.Ed degree. Teachers in public schools benefi tted from training on content knowledge in improving their Mathematics and Physical Science teaching, as well as ICT Learnership in improving computer literacy.

The continuation of funding for learners on teacher training allowed for the renewal of bursaries on B.Ed and other programmes noted in the Scarce and Critical Skills list of the ETDP SETA. Candidates were also offered internship opportunities in the human resources environment.



2013/14

Actual Achievement

2013/14


Distribution of Scarce and Critical Skills Guide 900 900 -

SDFs/Sector Skills specialists trained on the use of the guides 250 - -250



2013/14

Actual Achievement

2013/14

Deviation from

Planned Target

Lecturers trained on PIVOTAL programmes 33 49 16

Managers trained on Leadership and Management programmes 24 3 -21

Lecturers targeted for training as assessors and moderators 20 41 21




2013/14

Actual Achievement

2013/14


Teachers targeted for training in PIVOTAL programmes 120 0 -120

Teachers targeted for training on ICT learnership 50 50 -

Grades 7-9 teachers capacitated in subject content and methodology 0 103 103

Teachers targeted for support on Braille and SASL 80 79 -1

School based teachers targeted to enrol for B.Ed degree 25 44 19



2013/14

Actual Achievement

2013/14


Career Guides disseminated through partnerships 3 300 3 350 50

Students bursaries renewed 56 56 -

FET College students placed to gain work experience 33 33 -

UoT students placed to gain work experience 60 62 2

Students given second chance to re-write matric 166 130 36



2013/14

Actual Achievement

2013/14


Interns targeted for placement in internships 18 18 -

Unemployed youth placed in learnerships 165 165 -


The province participates in the Inter-SETA Forum where input is given on the PGDS strategy. Best practices are discussed and provincial initiatives are shared. Strategic engagements on a provincial level are facilitated in this process. The FET forum has also been established. The programmes of the FETs featured in discussions with FET CEOs, the SMT and HR managers. Programme content was mutually agreed upon by the FET Colleges and the ETDP SETA to assist with the implementation thereof. The FET College Principals’ Forum discussed and agreed on all the targets of the ETDP SETA. The ECD Forum and ECD Congress are instrumental in ensuring learner recruitment for ECD programmes.


4 Revenue Collection

Sources of revenue

2012/13 2013/14

Estimate Actual amount collected

(Over)/Under collection Estimate Actual amount

collected(Over)/Under

collection

R’000 R’000 R’000 R’000 R’000 R’000

Skills Development levies 283 102 282 665 -437 294 878 332 938 38 060

Provincial Contribution 94 119 94 853 734 97 512 93 364 -4 148

Penalties and interest 2 178 3 611 1 433 3 791 5 429 1 638

Investment income 14 000 16 100 2 100 8 102 17 786 9 684

Other - 669 669 - 1 718 1 718

Total 393 400 397 897 4 497 404 283 451 235 46 952


PART C: GOVERNANCE


1 IntroductionCorporate Governance refers to systems and processes through which public entities are controlled and held to account. The ETDP SETA is a public entity established in terms of Schedule 3A of the Public Finance Management Act (PFMA). ETDP SETA is one of the 21 Sector Education and Training Authorities (SETAs) established by the Minister of Higher Education and Training through the amended Skills Development Act of 1998. The ETDP SETA is governed by its Constitution.

2 Portfolio CommitteesThe ETDP SETA was not requested to appear before the Portfolio Committee in the 2013/14 fi nancial year. This can be attributed to sound corporate governance that the ETDP SETA continues to display.

3 Executive AuthorityThe Executive Authority in the SETA environment rests with the Minister of Higher Education and Training. It is the Minister that appoints members of the Accounting Authority. Furthermore, the Minister determines its remuneration as per the tariffs of the National Treasury.

4 The ETDP SETA BoardThe Constitution is the basis on which the ETDP SETA’s Accounting Authority is established. The Accounting Authority provides strategic leadership and guidance. The functions and powers of the Accounting Authority are outlined in the Constitution as follows:

• Providing effective leadership• Ensuring that the ETDP SETA implements the goals of the NSDS III• Providing strategic direction and managing institutional risk• Managing the performance of the ETDP SETA

4.1 Composition of the ETDP SETA Board The ETDP SETA has a Board of 15 members made up of the following constituent organisations.

Constituency Organisation

Ministerial Appointees Board Chairperson (1)Ministerial appointees (2)

Organised Labour SADTU (3)COSATU (1)NEHAWU (1)NTEU/PEU/other Federations (1)

Government Departments and Organised Levy Paying Employers

DHET (1)DBE (2)HESA (1)APPETD (1)NAISA/LIASA/SANGOCO (1)


4.2 Qualifi cations and expertise of the Board Members

Name Designation Qualifi cation Area of expertise Accounting Authority Directorships

Other committee or task teams

Shirley Mabusela

Chairperson Post Graduate Diploma in advanced Social Work.Bachelor of Social Work.Management Diploma.

Human Rights Development WorkTraining in ECD

Nelson Mandela Children’s Fund, Nelson Mandela Children’s Hospital Trust, DG Murray Trust, Old Mutual Super Fund, CEPD, National Health Insurance.University of Venda Council, Ethics Committee, Read Education Trust and Director of Bethlehem Hydro, Batlou Consulting, Hydro WSA, Dr Sam Motsoenyane Rural Development Trust.

ETDP SETA Executive Committee

Sipho Khuzwayo

Ministerial appointee

Masters Degree Human Capital Development

Thembalethu Trust. N/A

Maryna Marais

Ministerial appointee

Bachelor of Commerce

Management Accounting

Association of Colleges South Africa.

N/A

Lucas Maphila

Accounting Authority member

Higher Education Diploma

Education and Union Movement

Old Mutual Education Trust. ETDP SETA Quality Assurance Committee

Fezeka Loliwe

Accounting Authority member.

Masters Degree in Education.

Human Resources and Union Movement

SADTU Investment Holding, SACE Council.

ETDP SETA Executive Committee.ETDP SETA Finance Committee.ETDP SETA Human Resource Committee.

Veronica Hofmeester


Bachelor of Education

Education and Union Movement

N/A ETDP SETA Provisioning Chamber.ETDP SETA Schooling Chamber.

Joe Mpisi Accounting Authority member.

National Diploma in Film Making and Engineering

National Diploma in Technical Services

Strategic Planning and Negotiations

SACCO, NEHAWU National Provident fund, SASTA, SACP Central Committee, COSATU Central Committee and Wits Council.

ETDP SETA Executive Committee.ETDP SETA Human Resource Committee.ETDP SETA Audit Committee.

Graham Myers (Dr)


Doctorate in Technology (D.Tech)

Taxation N/A ETDP SETA FET/TVET Chamber Member.ETDP SETA Provisioning Chamber Chairperson.

Simone Geyer


BA (HDE)LLM – Master of Laws (Labour Law)

Human Resource Development and Negotiations

N/A ETDP SETA Executive Committee.

Nkosinathi Ngcobo


Masters Degree in Science (MSc)

Human Resource Development

N/A N/A

Diane Parker (Dr)


PhD in Education Curriculum Development

N/A N/A

Khanyisile Fakude


National Diploma in Human Resource (incomplete)

Human Resources Management

COSATU Provident Fund, Accounting Authority at NBC.

ETDP SETA Quality Assurance Committee.


Name Designation Qualifi cation Area of expertise Accounting Authority Directorships

Other committee or task teams

Sakkie van de Merwe (Prof)


Masters Degree in Business Administration

Financial Management

N/A ETDP SETA Finance Committee.

Mandi Wallace


Bachelor’s Degree in Training and Development

Skills Training and Development

N/A ETDP SETA Executive Committee.ETDP SETA HE & R Chamber.ETDP SETA HR Committee;HESA: SFD Chair.

Mandla Mthembu


Masters Degree Policy Development Chairperson of FFSLM. ETDP SETA Constitution Committee Task Team.ETDP SETA Schooling Chamber.

4.3 Accounting Authority meetings attendance

Name Designation Date of appointment Date resigned No. of meetings

attended

Shirley Mabusela Chairperson April 2011 N/A 4

Sipho Khuzwayo Member April 2011 N/A 4

Maryna Marais Member April 2011 N/A 4

Lucas Maphila Member July 2011 N/A 4

Fezeka Loliwe Member of AA and EXCO February 2012 N/A 3

Veronica Hofmeester Member April 2011 N/A 4

Joe Mpisi Member of AA and EXCO April 2011 N/A 3

Graham Myers (Dr) Member April 2011 June 2013 2

Simone Geyer Member of AA and EXCO April 2011 N/A 4

Nkosinathi Ngcobo Member April 2011 N/A 4

Diane Parker (Dr) Member April 2011 N/A 4

Khanyisile Fakude Member April 2011 N/A 3

Sakkie van de Merwe (Prof) Member April 2011 August 2013 2

Mandi Wallace Member of AA and EXCO April 2011 N/A 4

Mandla Mthembu Member November 2011 N/A 4


4.4 Accounting Authority Committees and Chambers4.4.1 Finance Committee meetings attendance

Name of member Number of meetings held Number of meetings attended

Sipho Sukati 4 4

Nick Nicholls 4 4

Sakkie van de Merwe (Prof) * 4 1

Joe Mpisi 4 2

Fezeka Loliwe 4 2

* Professor van de Merwe resigned as a member of the Finance Committee on 26th July 2013

4.4.2 Human Resources Committee meetings attendance

Name of member Number of meetings held Meetings attended

Paseka Njobe 5 5

Joe Mpisi 5 3

Mandi Wallace 5 5

Khanyisile Fakude 5 5

4.4.3 Remuneration Committee meetings attendance

Name of member Number of meetings held Meetings attended

Paseka Njobe 2 2

Joe Mpisi 2 1

Fezeka Loliwe 2 0

Sipho Sukati 2 1

4.4.4 Audit Committee meetings attendance

Name Qualifi cation Internal/External Position in ETDP SETA

Date appointed

Dateresigned

Number of meetings

held

Number ofmeetings attended

Vusi Mokwena CA(SA) External and Independent

N/A 1 Mar 2012 N/A 4 3

Dawood Coovadia CA(SA) External and Independent

N/A 1 Mar 2012 N/A 4 4

Pumla Mzizi CA(SA) External and Independent

N/A 1 Mar 2012 N/A 4 4

Trudy Guma Masters in Confl ict Resolution and Management

Labour Constituent Member and non-Board member

Higher Education Chamber

1 Mar 2012 N/A 4 3

Charles Molepo Post Graduate Diploma in Information Science

Post Graduate Diploma in Higher Education.

Employer Constituent Member and non- Board member

1 Mar 2012 N/A 4 4


4.4.5 Quality Assurance Committee meetings attendance


Mandla Msweli 4 4

Paul Beard (Prof) 4 1

David Shasha 4 4

Nirmala Gopal (Dr) 4 4

Vishnu Abhilak (Dr) 4 4

Silas Mpungose 4 3

Lucas Maphila 4 1

Khanyisile Fakude 4 1

4.5 Chamber meetings attendance4.5.1 ABET and ECD Chamber


Jonavon Rustin (appointed September 2013) 4 2

Raisibe Tshweu 4 4

Marie Louise Samuels 4 2

Victoria Mokgatle 4 3

Augustus Dludlu 4 3

Leonard Saul 4 1

Archie Mokonane 4 4

Meryl Anne Hewitt Fourie 4 4

Diseko Gopane 4 1

Kgakgamatso Motebe 4 4

David Diale 4 2

Tsela Moloi 4 3

Ruby Shasha 4 4

Inez Petersen 4 3

Gcotyelwa Xaba 4 3

Michelle MacDonald (resigned March 2014)

Yvonne Dos Santos (appointed March 2014)4

4

0

Glynnis Courtney (resigned January 2014)

Sharon Caldwell (appointed March 2014)4

0

1

Ismaiyili Isaacs (resigned February 2014)

Mpho Komana (appointed March 2014)4

3

0

Mancha Mamabolo (resigned June 2013)

John April (appointed July 2013)4

0

3

Vacant 4 0


4.5.2 Schooling Chamber


Haroon Mohamed 4 2

Oupa Bodibe (appointed July 2013) 4 1

Eddie Kirsten 4 3

Ezzy Lukhaimane 4 3

Roseline Tyler 4 3

Jeanette Moema 4 4

Sussan Malima 4 4

Vincent Maphumulo 4 4

Rashid Chopdat 4 4

Mandla Mthembu 4 4

Anthony Akal 4 3

Basil Manuel 4 3

Sibusiso Mchunu 4 0

Maryna Besseling 4 4

Faseega Solomon 4 3

Gaelebale BB Mahumapelo. 4 2

Brenda Ndelu 4 3

Mandisa Mvoko 4 3

Veronica Hofmeester 4 2

Robert Phalantwa Naape 4 3

Ruth Ledwaba 4 2

Duma Ncanywa (appointed June 2013) 4 3

Tsatsi Montso (appointed June 2013) 4 3

Suritha Kaminsky (resigned March 2014) 4 4

Zamile Hector Sinuka (resigned September 2013)

Ntjhotjho Adam Mosia (appointed March 2014)4

2

1

Ms Pinkie Mbatsane (resigned July 2013)

Richard Twala (appointed September 2013) 4

0

0


4.5.3 FET/TVET Chamber

Name of members Number of meetings held Number of meetings attended

Thamsanqa Mbalo 4 4

Tholsia Naicker (Dr) 4 2

Cynthia Reynders 4 3

Nthabiseng Kotsokoane 4 4

Bajith Panday 4 3

Monica Koen 4 3

Maurice Mopeli 4 2

Daniel Stander 4 4

Zweli Nqodi 4 3

Takalani Ratshilumela 4 4

Sibusiso Lekhulen 4 3

Sylvia Nkanyuza 4 4

Aruna Singh 4 0

Whitfi eld Green (Dr) 4 4

Graham Myers (Dr) (resigned April 2013)

Ryno van Rooyen (appointed September 2013) 4

1

0

Jean Williams (resigned September 2013)

Jacques Wessels (appointed March 2014)4

1

0

Kaizer Makole (resigned April 2013)

Samuel Fenyane (appointed July 2013)4

1

2

Leon Sinclair (resigned September 2013)

Fransie Terblanche (appointed March 2014)4

1

1

Vacant 4 0

Vacant 4 0

4.5.4 Higher Education and Research Chamber


Nirmala Gopal (Dr) 4 3

Mandi Wallace 4 3

Mantshego Selepe 4 1

Manoshni Moodley 4 4

Leo Doria 4 4

Louwrens Strydom 4 3

Lindelwa Mbingeleli 4 4

Derek Heradien 4 3

Renny Somnath 4 4

Trudy Guma 4 4

Silas Mpungose 4 4



Lehloma Ramajoe 4 4

Vincent Mtyende 4 4

Rick Edmonds 4 4

Ryno Van Rooyen 4 4

Hannelie Van Rensburg 4 1

Oscar Eybers 4 3

Shaheeda Essack (Dr) 4 4

Ingrid Thomson (appointed August 2013) 4 2

Vacant 4 0

4.5.5 ETD Quality Provisioning Chamber


Graham Myers (resigned June 2013)

Norman Kemp Prof (appointed August 2013)4

1

1

Gavin de Bruyn 4 4

Naphtali Molope 4 4

Vonani Mathonsi 4 2

Annamarie Goosen 4 3

David Shasha 4 4

Ntebo Leepile 4 2

Babette Le Roux 4 3

Harry Mangwathe 4 3

Robert Gumede 4 0

Nokuthula Mndawe 4 4

Mandlawenkosi Msweli 4 4

Tholsia Naicker (Dr) 4 3

Cynthia Reynders 4 0

Veronica Hofmeester (sent alternate) 4 1

Maggie Makgoba (resigned February 2014)

Ben Machipi (appointed February 2014)

4 2

1

Vacant 4 0

Vacant 4 0

Vacant 4 0

Vacant 4 0


4.6 Remuneration of the Board MembersThe ETDP SETA Chairperson and one Ministerial Appointee receive a Board Fee, while members of the Board receive a Meeting Attendance Fee. Members may claim to be reimbursed for travel costs incurred per kilometre. The ETDP SETA developed a remuneration policy, in line with prescripts of National Treasury, to regulate the remuneration process. DHET representatives are not remunerated for their attendance. However, discussions on the remuneration of the rest of public service representatives will soon reach fi nality, as discussions with Constituent Principals continue.

Name Board fees and Meeting feesR

Other allowance

Other expenses: (Travel expense)

R

TotalR

Shirley Mabusela 116 151.36 (includes Board fees) - - 116 151.36

Sipho Khuzwayo 50 026.95 (includes Board fees) - - 50 026.95

Maryna Marais - - - -

Lucas Maphila 9 165.00 - - 9 165.00

Fezeka Loliwe 21 385.00 - - 21 385.00

Veronica Hofmeester 9 165.00 - - 9 165.00

Joe Mpisi 9 165.00 - 522.60 9 687.60

Graham Myers 3 055.00 - 643.20 3 698.20

Simone Geyer - - - -

Nkosinathi Ngcobo 9 165.00 - 3 244.14 12 409.14

Khanyisile Fakude 9 165.00 - 48.24 9 213.24

Sakkie van de Merwe - - - -

Mandi Wallace 18 330.00 - R14 245.68 32 575.68

Mandla Mthembu 9 165.00 - R1 487.48 10 652.48

Diane Parker - - - -

4.7 ETDP SETA Strategic PartnersThe ETDP SETA, in partnerships with its strategic partners, committed to ensuring that the skills development initiatives are geared towards success in reducing poverty, in eliminating structural unemployment, in implementing a comprehensive social security system and building social cohesion. These strategic partners, who represent the governing structures of the ETDP SETA, are:

• National Department of Basic Education• Provincial Departments of Basic Education• Department of Higher Education and Training• South African Colleges Principals’ Organisation• Higher Education South Africa• National Youth Development Agency• National Youth Council• Association of Private Providers of Education and Training


5 Risk ManagementRisk is managed in the ETDP SETA by a Risk Management Committee which reports to the Audit Committee. The Committee is comprised of senior and middle management and two Board members and is chaired by the Chief Financial Offi cer. A risk assessment workshop is held annually to identify strategic and operational risks which are evaluated and captured in a risk register. The risk assessment workshop is facilitated independently to ensure effectiveness. The Internal Auditors compile the Audit Plan and base it on the risks identifi ed. Risks are identifi ed and action plans are implemented to mitigate the risks. The Risk Management Committee meets monthly to address problems encountered and to devise both detective and preventative strategies to mitigate the risks. The Risk Management Committee reports directly to the Audit Committee. The Audit Committee reviews the performance of the Risk Management Committee and reports to the Board.

6 Internal ControlsThe implementation of internal controls is ultimately the responsibility of the Board. This is delegated to the Chief Executive Offi cer who exercises an oversight role through Senior Management, the Risk Management Committee, Internal Auditors and the Audit Committee to ensure the effectiveness of the internal controls in the organisation.

7 Audit Committee and Internal Audit FunctionsThe Internal Audit function is the only operation outsourced by the ETDP SETA Board. This strategic decision is among others, based on the objectivity and integrity required in executing this function.

The Internal Audit Plan is approved by the Audit Committee which oversees the performance of the internal auditors. The Audit Committee is a sub-committee of the Board and reports quarterly to the Board. Its key activities include the following:

• The effectiveness of internal audit and internal controls• Risk management• The adequacy, reliability, accuracy and regularity of fi nancial information provided to the Accounting Authority• Any accounting and audit concerns arising from audit• Legal and Regulatory compliance

8 Compliance with Laws and RegulationsThe ETDP SETA is compliant with all legislation and regulations that govern public entities. The most critical of these is the National Constitution, the Skills Development Act as amended, the Skills Development Levies Act as amended, the Public Finance Management Act with its accompanying Treasury Regulations and the NSDS III.

9 Fraud and CorruptionThe ETDP SETA has a Fraud Prevention Policy and Plan which is approved by the Board. These are reviewed annually to ensure relevance and compliance with current trends and regulations. The Policy and Plan are made available to all staff and their attention is drawn to these at staff meetings. The plan covers whistle blowing. An anonymous fraud hotline is available for all staff and outside parties to use. Fraudulent activities that are reported are handled by the Chairperson of the Audit Committee to ensure independence.

10 Minimising Confl ict of InterestThe ETDP SETA Standard Constitution has a code of conduct that the Board and Governance Structure members must adhere to. The ETDP SETA staff have their own code of ethics that binds them to a certain level of ethical conduct. Any confl ict of interest that might arise may be reported at meetings or directly at the offi ce of the Chief Executive Offi cer. Members of the Governance Structures that have declared confl ict of interest on a particular matter are required to recuse themselves from a meeting when that particular matter is being discussed. The amendment of the SCM policy included the exclusion of Governance Structure members from participating in bidding processes, thus minimising the confl ict of interest. Consultants who provide services and goods to the ETDP SETA are required to provide professional, objective and impartial advice and at all times hold the client’s interests paramount, without any consideration for future work and strictly avoid confl icts with other assignments or their own corporate interests.


11 Code of ConductThe ETDP SETA’s code of conduct is found in Annexure 2 of its Constitution and is applicable to members of the Board, Chambers and Committees. The code ensures that Governance Structures members:

a. Stand in a fi duciary relationship to the ETDP SETA

b. Comply with all the applicable laws and regulations that regulate the activities in which they are engaged in, on behalf of the ETDP SETA

c. Perform their functions fairly, honestly and in good faith, giving full effect to the obligations and the spirit of the Skills Development Act as amended and the Constitution

d. Protect and promote the reputation of the ETDP SETA and promote goodwill towards it

e. Perform their duties conscientiously and in the best interest of the ETDP SETA

f. Conduct themselves ethically and in accordance with the principles of good governance

12 Health, Safety and Environmental IssuesThe Health, Safety and Wellness policies are included in the Human Resources Policy. The organisation has recently developed clear terms of reference for the committee which were served and adopted by both the Human Resources and the Risk Management Committees. HR elected one staff member to be the champion of the programme and intends taking the committee members for training on Occupational Health and Safety (OHS).


13 Audit Committee ReportAudit Committee responsibilities

The Audit Committee is responsible for the review of the following:

• The effectiveness of the internal control system• The effectiveness of the internal audit function• The risk areas of the ETDP SETA’s operations to be covered in the scope of internal and external audit• The adequacy and reliability of the performance and fi nancial information provided by management and other users of such

information• Any accounting and auditing concerns identifi ed as a result of internal and external audits• The ETDP SETA’s compliance with legal and regulatory provisions• The activities of the internal audit function, including its annual work programme, co-ordination with external auditors, the reports

on signifi cant investigations and the responses of management to specifi c recommendations• A review of the annual fi nancial statements and the opinion expressed by the Auditor-General thereon

Effectiveness of internal control

The Audit Committee has reviewed the internal controls for effectiveness and adequacy. The internal controls are effective and adequate as a basis of reducing both strategic and operational risks identifi ed by management.

The quality of the management and monthly/quarterly reports submitted in terms of legislation

The Audit Committee received and reviewed quarterly fi nancial and performance reports. Where performance was below the Annual Performance Plan targets, management put in place plans to improve identifi ed performance defi ciencies.

Evaluation of the public entity’s fi nancial statements

The Audit Committee evaluated the annual fi nancial statements presented in the annual report. The annual fi nancial statements fairly present the fi nancial performance, fi nancial position and results of fi nancial operations.

Summary of main activities undertaken by the Audit Committee during the fi nancial year under review

The Audit Committee undertook the following activities (amongst others) during the fi nancial year:

• Reviewed strategic and operational risk management controls in the SETA• Reviewed the fi nal risk register prepared by the ETDP SETA management• Reviewed quarterly operational and fi nancial performance information prepared by the ETDP SETA’s management for fi nal approval

by its Board• Reviewed and approved the risk-based internal audit plan prepared by internal auditors• Reviewed the Audit Committee Charter to ensure its continuing relevance and presented the same to the Board for their fi nal

approval• Reviewed and approved the Internal Audit Charter• Received periodic internal audit reports on their fi ndings• Conducted a peer review as well as a review of the internal audit function• Attended Board meetings to raise any concerns that the Audit Committee might have had• Received anonymous whistle-blowing reports from an independent service provider and followed up the same with management

where relevant


Internal Audit

The Internal Auditors of the ETDP SETA conducted reviews of Revenue and Budget Management, Supply Chain Management, Marketing and Communications, Human Resources Management and follow-ups for Governance and the Auditor-General’s Management Report in the fi nancial year. Recommendations made are incorporated into procedures and controls of the organisation.

External Audit

There are no unresolved issues raised by the Auditor-General.

There are no additional issues that we wish to raise pertaining specifi cally to the ETDP SETA.

Conclusion

This report must be read together with the annual report.

_____________________________

Mr Vusi Mokwena: CA(SA)

Chairperson – Audit Committee

Date: 31 July 2014


PART D: HUMAN RESOURCE MANAGEMENT


1 IntroductionOverview of Human Resources (HR)

The ETDP SETA, in its endeavour to respond to the National Skills Development Strategy III, pursues the overall mandate to improve organisational performance through effective, effi cient and economic development practices. This mandate has been progressively achieved through the process of integrating developed policies and strategies for all supporting units of the organisation which are consolidated and synergised.

HR priorities and impact

The organisation accordingly planned to achieve the following objectives as per the Annual Performance Plan for the year under review:

Strategic objectives Expected outcomes/impact Progress and accomplishments

To ensure an integrated organisational development and performance strategy

Continued implementation of the integrated organisational development and performance strategy

The following documents to constitute an integrated strategy are in place:

- Media and Public Relations Strategy- Draft HR Strategy- ICT Strategy- SCM Policies and Procedures- Remuneration Strategy

To fi ll all positions aligned to the new strategy in the organogram

Organogram aligned to strategy through:- Redefi ned job descriptions- Aligned organogram and

recruitment strategy is implemented

- All appointments were based on the Board approved organogram- 41 Job descriptions were reviewed

To develop and improve staff capacity

- Bursaries awarded for further study- In service training awards made to

staff- Managers undergone management

development in terms of gaps identifi ed through PMDS

- 22 bursaries awarded- 52 training programmes attended by staff- Managers attended Risk Management and SCM workshops

To implement an organisational transformation strategy

The programme includes Change Management

Implementation of the strategy to enhance organisational transformation

To review and develop policies

Reviewed policies approved by the Board in place.

HR policies approved by the Board

Workforce planning framework and key recruitment strategy

The organisation has developed HR policies and procedures for workforce recruitment and uses those to attract a skilled and capable workforce. The policy also caters for the retention of talented staff to reduce staff turnover.

Employee performance management and framework

The organisation uses the Performance Management and Development System (PMDS) to manage performance and to develop staff. Staff development, informed by the PMDS processes are in the form of bursaries, in-service training and skills development programmes.

Employee wellness programme

The ETDP SETA has developed a set of principles that form a basis for the employee assistance programme to be managed by a professional service provider. These principles are to provide clear guidelines and scope for the programme that will create a productive workforce.

Policy development

The organisation has Board approved policies and procedures that provide clear direction to the staff with regard to values, vision, mission, objectives, code of ethics, disciplinary procedures and other regulations. Policy review is an annual event and all policies were approved by the Board for the year under review.


Achievements

The organisation is proud to have made progress with regard to the following areas:

• The Human Resources Committee as the Board sub-committee has been leading in providing guidance to the HR functions and activities

• The Remuneration Strategy is in place and the second phase of the migration from Peromnes to the Patterson system will begin in the next fi nancial year

• The Remuneration Committee has led a successful and incident free process of negotiations with Labour and the outcome was welcomed by all

• The Recognition Agreement Process is incomplete and will be fi nalised during the next fi nancial year• The Staff Development Process was implemented and close to 95% of the budget was utilised• The WSPs/ATRs were accepted and approved• All business units of the organisation developed policies and procedures and/or strategies that are either in draft form or have

been approved

Challenges identifi ed

• The ETDP SETA experienced a decline in the offers of employment as a result of the uncertainty that potential employees have on the continued existence of employment contracts beyond 2016, which is the last year for current SETA mandate

• The capping of the budget led to a reduction in the salary bill which limited workforce increase

Future HR plans

• The alignment of remuneration patterns from the Peromnes to Patterson• Synergising various strategies form business units into an integrated and effective HR Strategy• To develop and implement an improved recruitment strategy that will bring a required set of skills within a short period of time

2 Human Resource Oversight StatisticsPersonnel cost by programme

ProgrammeTotal Expenditure

for the entity (R’000)

Personnel Expenditure

(R’000)

Personnel exp. as a % of total

exp.

No. of employees

Average personnel cost per employee

(R’000)

Salaries 53 406 55 854 15.06 107 522

Allowances 828

Rewards 1 620

TOTAL 55 854

Personnel cost by salary band

Level Personnel

Expenditure (R’000)

% of personnel exp. to total

personnel cost

No. of employees

Average personnel cost per employee

(R’000)Top Management 4 736 8.48 4 1 184

Senior Management 5 200 9.31 6 867

Professional qualifi ed 13 143 23.53 18 730

Skilled 22 777 40.78 47 485

Semi-skilled 9 115 16.32 28 326

Unskilled 883 1.58 4 221

TOTAL 55 854 100 107 522


Performance Rewards

ProgrammePerformance

rewards(R’000)

Personnel Expenditure

(R’000)

% of performance

rewards to total personnel cost

Top Management 132 4 736 2.79

Senior Management 81 5 200 1.56

Professional qualifi ed 398 13 143 3.03

Skilled 760 22 777 3.34

Semi-skilled 227 9 115 2.49

Unskilled 22 883 2.49

TOTAL 1 620 55 854 2.90

Training Costs

Personnel Expenditure (R’000)

Training Expenditure(R’000)

Training Expenditure as a % of Personnel Cost.

No. of employees trained

Avg. training cost per employee(R’000)

55 854 1 570 2.81 74 21

Employment and vacancies

2012/13 2013/14

No. of Employees Approved Posts No. of Employees Vacancies % of vacancies

105 120 107 13 12.15

2012/13 2013/14

Programme No. of Employees

Approved Posts

No. of Employees Vacancies % of vacancies

Top Management 3 1 4 1 25.00

Senior Management 5 2 6 1 16.66

Professional qualifi ed 19 2 18 2 11.11

Skilled 45 5 47 5 10.63

Semi-skilled 29 4 28 4 14.28

Unskilled 4 0 4 0 0.00

TOTAL 105 14 107 13 12.15%

Explanations:

• Thirteen vacancies were in the selection process for the year under review• Nine of the vacancies are at the fi nal completion stage of the recruitment and selection process, with short listing and interviews

completed• Only three posts are due for the selection process and in the recruitment schedule for processing


Employment changes

Information on employment changes have been demonstrated and verifi ed in the table below. Turnover rates are at 7.48% currently and refl ect an increase compared with the previous year at 5.71 %.

Salary BandEmployment at beginning of

periodAppointments Terminations

Employment at end of the

period

Top Management 3 1 0 4

Senior Management 5 1 0 6

Professional qualifi ed 18 2 2 18

Skilled 44 7 4 47

Semi-skilled 29 0 1 28

Unskilled 4 1 1 4

Total 103 12 8 107

Reasons for staff leaving

Reason Number % of total number of staff leaving

Death - -

Resignation 7 6.54%

Dismissal 1 0.94%

Retirement - -

Ill health - -

Expiry of contract - -

Other - -

Total 8 7.48%

Explanations:

Most of the staff resignations were voluntarily. The reasons are predominantly better opportunities elsewhere.

Positions are advertised as soon as resignations are received. Internal candidates are also encouraged to apply.

Labour Relations: Misconduct and Disciplinary Action

Nature of Disciplinary Action Number

Verbal Warning 8

Written Warning 2

Final Written Warning 1

Dismissal 1


Equity Target and Employment Equity Status

MALE

LevelsAfrican Coloured Indian White

Current Target Current Target Current Target Current Target

Top Management 1 - - - - - 1 -

Senior Management 3 - - - - - 1 -

Professional qualifi ed 7 - 1 - 2 - - -

Skilled 13 - 1 - 3 - - -

Semi-skilled 6 - - - - - - -

Unskilled 2 - - - - - - -

TOTAL 33 - 2 - 5 - 2 -

FEMALE

LevelsAfrican Coloured Indian White

Current Target Current Target Current Target Current Target

Top Management 2 - - - - - - -

Senior Management 2 - - - - - - -

Professional qualifi ed 6 - 2 - - - 2 -

Skilled 24 - 1 - 1 - 1 -

Semi-skilled 15 - 4 - 1 - 4 -

Unskilled 2 - - - - - - -

TOTAL 51 - 7 - 2 - 6 -

DISABLED STAFF

LevelsMale Female

Current Target Current Target

Top Management - - - -

Senior Management - - - -

Professional qualifi ed 1 - - -

Skilled - - 1 -

Semi-skilled - - - -

Unskilled - - - -

TOTAL 1 1 2

Explanations:

The SETA constantly seeks out applicants with disabilities and utilises various advertising media to broaden its reach to persons with disabilities.


PART E: FINANCIAL INFORMATION


1 REPORT OF THE AUDITOR-GENERAL TO PARLIAMENT ON THE EDUCATION, TRAINING AND DEVELOPMENT PRACTICES SECTOR EDUCATION AND TRAINING AUTHORITY (ETDP SETA)

REPORT ON THE FINANCIAL STATEMENTS

Introduction

1. I have audited the fi nancial statements of the Education, Training and Development Practices Sector Education and Training Authority (ETDP SETA) set out on pages 87 to 121, which comprise the statement of fi nancial position as at 31 March 2014, the statement of fi nancial performance, statement of changes in net assets and the cash fl ow statement for the year then ended and the notes, comprising a summary of signifi cant accounting policies and other explanatory information.

The accounting authority’s responsibility for the fi nancial statements

2. The accounting authority is responsible for the preparation and fair presentation of these fi nancial statements in accordance with the South African Standards of Generally Recognised Accounting Practises (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 (SDA), 1998 (Act No. 97 of 1998), and for such internal control as the accounting authority determines is necessary to enable the preparation of fi nancial 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 fi nancial statements based on my audit. I conducted my audit in accordance with the Public Audit Act of South Africa, 2004 (Act No. 25 of 2004) (PAA), the General Notice issued in terms thereof and International Standards on Auditing. Those standards require that I comply with ethical requirements, and plan and perform the audit to obtain reasonable assurance that the fi nancial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the fi nancial 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 fi nancial 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 fi nancial statements.

5. I believe that the audit evidence I have obtained is suffi cient and appropriate to provide a basis for my audit opinion.

Opinion

6. In my opinion, the fi nancial statements present fairly, in all material respects, the fi nancial position of the Education, Training and Development Practices Sector Education and Training Authority (ETDP SETA) as at 31 March 2014 and its fi nancial performance and cash fl ows for the year then ended in accordance with the SA Standards of GRAP, the requirements of the PFMA and SDA.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

7. In accordance with the PAA and the general notice issued in terms thereof, I report the following fi ndings on the reported performance information against predetermined objectives for selected programmes presented in the annual performance report, compliance with legislation as well as internal control. The objective of my tests was to identify reportable fi ndings 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

8. 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 ETDP SETA for the year ended 31 March 2014:

• Programme 2: Supporting FET institutions to be responsive to ETD sector and national priorities on pages 23 to 26.• Programme 3: Teacher development in support of the ISPFTED-SA on pages 26 to 28.• Programme 4: Increasing student access to and graduate output in higher education and further education institutions on

pages 28 to 31.• Programme 5: Youth development for employability on pages 31 to 32.• Grants – Mandatory and previously committed on pages 100, 109 to 112.

9. I evaluated the reported performance information against the overall criteria of usefulness and reliability.

10. 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. We further performed tests to determine whether indicators and targets were well defi ned, verifi able, specifi c, measurable, time bound and relevant, as required by the National Treasury’s Framework for managing programme performance information (FMPPI).

11. I assessed the reliability of the reported performance information to determine whether it was valid, accurate and complete.

12. I did not raise any material fi ndings on the usefulness and reliability of the reported information of the selected programmes.

Additional matters

13. Although I did not raise material fi ndings on the usefulness and reliability of the reported performance information for the selected programmes, I draw attention to the following matters:

Achievement of planned targets

14. Refer to the annual performance report on pages 21 to 41 for information on the achievement of planned targets.

Adjustment of material misstatements

15. I identifi ed material misstatements in the annual performance report submitted for auditing on the reported performance information of Programmes 3 (Teacher development in support of the ISPFTED-SA) and 4 (Increasing student access to and graduate output in higher education and further education institutions). As management subsequently corrected the misstatements, I did not raise any material fi ndings on the usefulness and reliability of the reported performance information.

Compliance with legislation

16. I performed procedures to obtain evidence that the public entity had complied with applicable legislation regarding fi nancial matters, fi nancial management and other related matters. My fi ndings on material non-compliance with specifi c matters in key legislation, as set out in the general notice issued in terms of the PAA, are as follows:

Annual fi nancial statements

17. The fi nancial statements submitted for auditing were not prepared in accordance with the prescribed fi nancial reporting framework, as required by section 55(1) (b) of the PFMA. Material misstatements of commitments identifi ed by the auditors in the submitted fi nancial statements were subsequently corrected, resulting in the fi nancial statements receiving an unqualifi ed audit opinion.

Internal control

18. I considered internal control relevant to my audit of the fi nancial statements, annual performance report and compliance with legislation. The matters reported below are limited to the signifi cant control defi ciencies that resulted in the fi ndings on non-compliance with legislation included in this report:


Leadership

19. The accounting authority did not implement the proper internal control and review measures in place to ensure that information reported is valid, accurate and complete with regard to the commitments.

Financial and performance management

20. The entity did not have a proper system of records management that provides for the maintenance of information that supports the disclosure of commitments in the annual fi nancial statements.

21. Management did not monitor controls over quarterly recording and reconciling of transactions to ensure that complete and accurate recording of actual achievements of targets is achieved.

Pretoria30 July 2014


EDUCATION, TRAINING AND DEVELOPMENT PRACTICES SECTOR EDUCATION AND TRAINING AUTHORITY

Annual Financial Statements

for the year ended

31 MARCH 2014

The Annual Financial Statements for the year ended 31 March 2014, set out on pages 87 to 121, have been approved by the Accounting Authority in terms of section 51(1) (f) of the Public Finance Management Act (PFMA), No 1 of 1999 on 23 May 2014, and are signed on its behalf by:

______________________________________ ______________________________________

Ms Nombulelo Nxesi Ms Shirley Mabusela

CHIEF EXECUTIVE OFFICER BOARD CHAIRPERSON


CONTENTS Page

Statement of Financial Performance ............................................................................................................................ 87

Statement of Financial Position .................................................................................................................................. 88

Statement of Changes in Net Assets ........................................................................................................................... 89

Cash Flow Statement .............................................................................................................................................. 90

Notes to the Annual Financial Statements ..............................................................................................................91-121


2013/14 2012/13

Note R’000 R’000

REVENUE

Non - Exchange Skills Development Levy: income 3 424,482 380,990

Non - Exchange Skills Development Levy: penalties and interest 5,429 3,611

QCTO income 1,820 -

Investment income from exchange transactions 4 17,786 16,100

Other income from exchange transactions 5 1,718 452

Total revenue 451,235 401,153

EXPENSES

Mandatory and discretionary grants 6 -221,253 -239,557

Administration expenses 7 -115,930 -101,913

QCTO expense -510 -

FET Infrastructure Funding expense 8 -33,128 -

Total expenses -370,821 -341,470

NET SURPLUS FOR THE YEAR 2 80,414 59,683

STATEMENT OF FINANCIAL PERFORMANCEFor the year ended 31 March 2014


2013/14 2012/13

Note R’000 R’000

ASSETS

Non-current assets

Property, plant and equipment 9 7,028 7,109

Intangible assets 10 930 362

7,958 7,471

Current assets

Consumables 11 486 168

Accounts receivable from non-exchange transactions 12 2,035 7,885

Accounts receivable from exchange transactions 13 2,535 2,467

Cash and cash equivalents 14 454,816 370,509

459,872 381,029

TOTAL ASSETS 467,830 388,500

LESS : LIABILITIES

Long term liabilities

FET Infrastructure Funding Payable 17 13,151 -

13,151 -

Current liabilities

Accounts payable from non-exchange transactions 15 15,856 48,954

Accounts payable from exchange transactions 16 17,120 16,808

FET Infrastructure Funding Payable 17 18,405 -

Accrued employee entitlements 18 4,572 4,425

55,953 70,187

TOTAL LIABILITIES 69,104 70,187

NET ASSETS AND LIABILITIES 398,726 318,313

RESERVES

Administration reserve 7,958 7,471

Employer grant reserve 22,865 -

Discretionary reserve 367,902 310,842

398,726 318,313

STATEMENT OF FINANCIAL POSITIONFor the year ended 31 March 2014


NoteAdministration

reserveEmployer

grant reserve

Discretionary

reserve Unappropriated

Surplus Total

R’000 R’000 R’000 R’000 R’000

Balance at 31 March 2012 4,495 - 254,134 - 258,629

Net surplus per Statement of Financial Performance - - - 59,683 59,683

Allocation of unappropriated surplus 32,551 40,097 -12,965 -59,683 -

Excess reserves transferred to Discretionary reserve -29,575 -40,097 69,672 - -

Balance at 31 March 2013 7,471 - 310,841 - 318,313

Net surplus per Statement of Financial Performance - - - 80,414 80,414

Allocation of unappropriated surplus 2 18,444 22,866 39,104 -80,414 -

Excess reserves transferred to Discretionary reserve -17,957 - 17,957 - -

Balance at 31 March 2014 7,958 22,866 367,902 - 398,726

STATEMENT OF CHANGES IN NET ASSETSFor the year ended 31 March 2014


2013/14 2012/13

Note R’000 R’000

CASH FLOWS FROM OPERATING ACTIVITIES

Operating activities

Cash receipts from stakeholders 437,580 381,495

Levies received - Administration 131,346 134,012

- Employer grants 113,872 174,283

- Discretionary grants 185,113 68,140

- QCTO 1,820 -

Interest and penalties received 5,429 3,611

Other income - 1,449

Cash paid to stakeholders, suppliers and employees -368,787 -308,342

Grants and project payments -254,351 -223,103

QCTO -509 -

Compensation of employees -55,707 -47,094

Payments to suppliers -58,220 -38,145

Net cash infl ow from operating activities 19 68,793 73,153

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property, plant and equipment -2,296 -3,455

Proceeds from disposal of property, plant and equipment - 83

Investment income 17,810 16,042

Net cash infl ow from investing activities 15,514 12,670

Net increase in cash and cash equivalents 84,307 85,823

Cash and cash equivalents at beginning of the year 14 370,509 284,686

Cash and cash equivalents at end of the year 14 454,816 370,509

CASH FLOW STATEMENTFor the year ended 31 March 2014


1 ACCOUNTING POLICIES

The principal accounting policies adopted in the preparation of these fi nancial statements are set out below and are, in all material respects, consistent with those of the previous year, except as otherwise indicated.

1.1 Basis of preparation

The fi nancial 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.

1.2 Currency and level of rounding

These fi nancial statements are presented in South African Rands, as this is the currency in which all entity transactions are denominated. Furthermore, all fi gures presented are rounded to the nearest thousand.

1.3 Revenue recognition

Skills Development Levy transfers are recognised when it is probable that future economic benefi ts will fl ow to the Education, Training and Development Practices Sector Education and Training Authority (ETDP SETA) and these benefi ts can be measured reliably. This occurs when the Department of Higher Education and Training (DHET) either makes an allocation or payment, whichever comes fi rst, to the ETDP SETA as required by Section 8 of the Skills Development Levies Act, No. 9 of 1999. The Skills Development Levy transfer is measured at the fair value of the consideration received. Contributions from the Departments of Basic Education (DBE) are recognised when cash is received.

1.3.1 Levy income

In terms of section 3(1) and 3(4) of the Skills Development Levies Act No. 9 of 1999, registered member companies of the ETDP SETA pay a skills development levy of 1% of their total payroll cost to the South African Revenue Service (SARS).

80% of skills development levies are paid over to the ETDP SETA (net of the 20% contribution to the National Skills Fund (NSF)).

Levy income is recognised at the earlier of the allocation of monies by the DHET to the ETDP SETA or when cash is received.

The ETDP SETA refunds amounts to employers in the form of grants, based on information from SARS. Where SARS retrospectively amends the information on levies collected, it may result in grants that have been paid to certain employers that are in excess of the amount the ETDP SETA is permitted to have granted to employers. A receivable relating to the overpayment to the employer in earlier periods is raised at the amount of such grant overpayment, net of bad debts and provision for irrecoverable amounts.

Revenue is adjusted for inter SETA transfers due to employers changing SETAs. Such adjustments are separately disclosed as inter SETA transfers. The amount of the inter SETA adjustment is calculated according to the Standard Operating Procedure issued in October 2006 by the Department of Labour.

When a new employer is transferred to the ETDP SETA, the levies transferred by the former SETA are recognised as revenue and allocated to the respective category to maintain its original identity.

Employers who have annual payrolls below R500 000 have been exempted from further payment of skills development levies. In cases where payments have been made by these employers in error, an accrual has been made for the refund of the levies covering a period of 5 years (Prior year: 3 years).

1.3.2 Interest and penalties

Interest and penalties are recognised at the earlier of the allocation by the Department of Higher Education and Training to the ETDP SETA or when cash is received.

NOTES TO THE ANNUAL FINANCIAL STATEMENTSFor the year ended 31 March 2014


NOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)For the year ended 31 March 2014

1.3.3 Government grants and other donor income

Conditional government grants and other conditional donor funding received are recorded as deferred income when they become receivable and are then recognised as income on a systematic basis over the period necessary to match the grants with the related costs which they are intended to compensate. Unconditional grants received are recognised when the amounts have been received.

1.3.4 Investment Income

Interest from investments is recognised when the bank has credited the investment with interest due in line with the maturity date of the investment. Interest from the call account is accrued on a time proportion basis as advised by the banks at the reporting date.

1.4 Grants and project expenditure

A registered organisation may recover a maximum of 70% of its total levy payment by complying with the grant criteria in accordance with the Skills Development Regulations issued in terms of the Skills Development Levies Act No. 9 of 1999. Grants and project expenditure are measured at the amounts incurred. These amounts represent the fair value of the transactions.

1.4.1 Mandatory grant payments

Mandatory grant expenditure is recognised when the submission by a member organisation of a Workplace Skills Plan (WSP) and the Annual Training Report (ATR) within the agreed cut off period has been approved by the ETDP SETA for payment. In the case where a WSP/ATR has been approved and transfers from the DHET have been received but actual payment has not been made, an accrual is made for the amounts payable. These grants are measured at the amounts paid/payable which represent the fair value of the transaction. The amount payable is 20% (Prior year: 50%) of the levies paid to SARS by the member organisation and remitted to ETDP SETA by the DHET.

1.4.2 Discretionary grants and project payments

Discretionary grants relate to the portion of levies paid to SARS by member organisations and remitted to ETDP SETA by the DHET plus surplus from the administration budget, interest earned from the banks and forfeited mandatory grants. This grant is used to fund training and skills enhancing programmes in the sector. The project expenditure is recognised when the training or the skills enhancing programme has been delivered in accordance with the contract of agreement between the ETDP SETA and the training institution or provider. These grants are measured at the amounts paid/payable which represent the fair value of the transaction.

1.4.3 QCTO Expense

An amount determined by the Minister based on QCTO related income received, as per section 2(4) of the Grant Regulations issued in terms of Government Gazette 35940.

1.5 Irregular and fruitless and wasteful expenditure

Irregular expenditure means expenditure incurred in contravention of, or not in accordance with, a requirement of any applicable legislation, including:

- The PFMA - The Skills Development Act

Fruitless and wasteful expenditure means expenditure that was made in vain and could have been avoided had reasonable care been exercised.

All irregular and fruitless and wasteful expenditure is charged against income in the period in which it is incurred.



1.6 Consumables

Consumables are prepaid stationery, refreshments and cleaning materials and are recognised as an asset at cost on the date of acquisition and are subsequently recognised in surplus or defi cit as they are consumed.

1.7 Property, plant and equipment

Property, plant and equipment is stated at historical cost less accumulated depreciation and adjusted for any impairments. Historical cost includes expenditure that is directly attributable to the acquisition of the items. No assets are held with the primary objective of generating a commercial return; hence all assets are classifi ed as non-cash-generating. Depreciation is calculated on the straight-line method to write off the cost of each asset to estimated residual value over its estimated useful life as noted below. The assets’ residual values and useful lives are reviewed and adjusted if appropriate, at each reporting date.

Range of rates

- Audiovisual equipment 16% - 20%

- Computer equipment 21% - 33%

- Kitchen equipment 14%- 15%

- Leasehold improvements 15% - 15%

- Offi ce furniture and fi ttings 11% - 15%

- Offi ce equipment 15% - 20%

- Minor assets 12% - 100%

- Motor vehicle 13% - 20%

Each part of an item of property, plant and equipment is depreciated separately. Depreciation commences when the items of property, plant and equipment are available for use and ceases at the earlier of the date that the asset is classifi ed as held for sale or included in a disposal group classifi ed as held for sale and the date that the asset is derecognised.

The estimated useful life of the assets is limited to the remaining period of the licence issued to the ETDP SETA by the Minister of Higher Education and Training. The remaining period has been extended to March 2016. Where the carrying amount of an asset is greater than the estimated recoverable amount, it is written down immediately to its recoverable amount (i.e. impairment losses are recognised).

Gains and losses on disposal of property, plant and equipment are determined by reference to their carrying amount and are taken into account in determining the operating surplus/defi cit.

1.8 Intangible assets

Intangible assets are stated at historical cost less accumulated amortisation and adjusted for any impairments. Historical cost includes expenditure that is directly attributable to the acquisition of the item. No assets are held with the primary objective of generating a commercial return; hence all assets are classifi ed as non-cash-generating. All software is commercially purchased and no labour component is applicable that may require capitalisation. Amortisation is calculated on the straight-line method to write off the cost of each asset to its estimated residual value over its estimated useful life as noted below. Useful lives and residual values of assets are re-estimated annually to fi nite periods. The assets are then amortised over their re-assessed useful lives.

Range of rates

- Computer software 20% - 33%



The estimated useful life of the assets is limited to the remaining period of the licence issued to the ETDP SETA by the Minister of Higher Education and Training. The remaining period has been extended to March 2016. Where the carrying amount of an asset is greater than the estimated recoverable amount, it is written down immediately to its recoverable amount (i.e. impairment losses are recognised).

1.9 Leasing

Leases of property, plant and equipment where ETDP SETA has substantially all the risks and rewards of ownership, are classifi ed as fi nance leases. Finance leases are capitalised at inception of the lease at the lower of fair value of the leased property or the present value of the minimum lease payments. Each lease payment is allocated between the liability and fi nance charges so as to achieve a constant rate on the outstanding fi nance balance. The corresponding rental obligations net of fi nance charges, are charged to liability. The interest element is charged to the Statement of Financial Performance over the lease period. Leases, where a signifi cant portion of risks and rewards of ownership are retained by the lessor, are classifi ed as operating leases. Operating costs are charged against operating income on a straight line basis over the period of the lease.

1.10 Retirement benefi t costs

The entity operates a defi ned contribution plan, the assets of which are held in separate trustee-administered funds. The plan is generally funded by payments from the entity and employees, and is managed by external fund managers determined by the members of the fund.

Payments to defi ned contribution retirement benefi t plans are charged to the Statement of Financial Performance in the year to which they relate. When an employee has rendered service during a period, ETDP SETA recognises the contribution payable to a defi ned contribution plan in exchange for that service: (a) as a liability after deducting any contributions already paid. If the contribution already paid exceeds the contribution due for the service, the ETDP SETA shall recognise that excess as an asset to the extent that it will lead to a reduction in future payments and (b) as an expense.

The rules of the defi ned contribution plan determine the following in respect of contributions: - Contribution by employee = 7,5% of retirement funding income - Contribution by employer = 7,5% of retirement funding income

1.11 Provisions

Provisions are recognised when the ETDP SETA has a present obligation as a result of a past event and it is probable that this will result in an outfl ow of economic benefi ts that can be estimated reliably. The amount of a provision is the present value of the expenditure expected to be required to settle the obligation.

1.11.1 Provisions for discretionary grants and commitments

No provision 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 fi nancial statements.

1.12 Financial instruments

Financial assets and fi nancial liabilities are recognised on the ETDP SETA’s Statement of Financial Position when the ETDP SETA becomes a party to the contractual provisions of the instrument.

Financial instruments are initially measured at fair value, including transactional costs. Subsequent to initial recognition these instruments are measured as set out below:



1.12.1 Financial assets

ETDP SETA’s principal fi nancial assets are accounts receivable and other receivables, and cash and cash equivalents.

Accounts and other receivables

Accounts and other receivables are subsequently measured at their amortised cost using the effective interest rate method and reduced by appropriate allowances for estimated irrecoverable amounts which represents fair value.

Cash and cash equivalents

Cash and cash equivalents are measured at fair value.

Financial assets or a portion thereof are derecognised when the contractual rights to the benefi ts specifi ed in the contract expire and ETDP SETA surrenders those rights or otherwise loses control of the contractual rights that comprise the fi nancial asset. On derecognition, the difference between the carrying amount of the fi nancial assets and the sum of the proceeds receivable and any prior adjustment to refl ect the fair value of the asset that had been reported in net assets, is included in surplus or defi cit for the period.

1.12.2 Financial liabilities

The ETDP SETA’s principal fi nancial liabilities are accounts payable and other payables.

All fi nancial liabilities are measured at amortised cost, comprising original debts less principal payments and amortisations which represents fair value.

Gains and losses arising from a change in the fair value of fi nancial instruments, other than available for sale fi nancial assets, are included in surplus or defi cit in the period in which it arises.

A fi nancial liability or part thereof is derecognised when the obligation specifi ed in the contract is discharged, cancelled or expires. On derecognition, the difference between the carrying amount of the fi nancial liablity including related unamortised costs, and the amount paid for it is included in surplus or defi cit for the period.

The fair values at which fi nancial 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 the expected future cash fl ows at the prevailng interest rates. The fair values have been estimated using available market information and appropriate methodologies but are not necessarily indicative of the amounts that the ETDP SETA could realise in the normal course of business. The carrying amount of fi nancial assets and liablities with a maturity of less than one year, is assumed to approximate their fair value due to the short term trading cycles of these items.

Financial assets and liabilities are offset if there is any intention to realise the asset and settle the liability simultaneously and a legally enforcable right to offset exists.

1.13 Net Assets

This is represented by reserves as per the restrictions placed on the distribution of monies received in accordance with the Regulations issued in terms of the Skills Development Act, 1998 (Act No. 97 of 1998).

The following reserves are utilised :

- Administration reserve - Employer grant reserve - Discretionary reserve



Member employer company levy payments are set aside in terms of the Skills Development Act and the regulations issued in terms of the Act, for the purpose of:

2013/14 2012/13

% %

Administration costs of the ETDP SETA 10.5 10

Including 0.5% payable to QCTO (Prior year: 0%)

Employer grants 20 50

Discretionary grants and projects 49.5 20

80 80

In addition, contributions received from public service employers in the national or provincial spheres of government may be used to pay for administration costs.

Interest and penalties received from SARS as well as interest received on investments are utilised for discretionary grants and projects. Other income received is utilised in accordance with the stipulations of the funder.

The net surplus/defi cit is allocated to the Administration reserve, the Employer grant reserve and the Discretionary reserve based on the above.

After retaining an amount to cover future depreciation of assets the surplus funds in the Administration reserve are moved to the Discretionary reserve at year end. Employer grant reserve funds that are not provided for specifi c grants are moved to the Discretionary reserve. Accruals are made for grants to be paid from levies that have not been received at reporting date.

1.14 Impairment of assets

At each reporting period, the ETDP SETA asseses whether there is any indication that an asset may be impaired. If any such indication exists, the ETDP SETA estimates the recoverable amount of the asset. If it is not possible to estimate the recoverable amount of the individual asset, the recoverable amount of the cash generating unit to which the asset belongs is determined. The recoverable amount of an asset or cash generating unit is the higher of its fair value less cost to sell and its value in use.

If the recoverable amount is less than its carrying amount, the carrying amount is reduced to its recoverable amount. This reduction is the impairment loss. In assessing value in use, the estimated future cash fl ows are discounted to their present value using a discount rate that refl ects current market assessments of the time value of money and the risks specifi c to the asset. An impairment loss of assets carried at cost less any accumulated depreciation or amortisation is immediately recognised in surplus or defi cit.

A reversal of an impairment loss of assets carried at cost less accumulated depreciation or amortisation other than goodwill is immediately recognised in surplus or defi cit.

1.15 Revenue and expenses from exchange and non-exchange transactions

Revenue from exchange transactions refers to revenue that accrued to the ETDP SETA directly in return for services rendered, the value of which approximates the consideration received or receivable.

Revenue from non-exchange transactions refers to transactions where ETDP SETA received revenue from another party 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 qualifi es for recognition as an asset and there is no liability to repay the amount.



1.16 Comparative fi gures

Where necessary, comparative fi gures have been adjusted to conform to changes in presentation in the current year.

1.17 Related parties

Parties are considered to be related if one party has the ability to control the other party or exercise signifi cant infl uence over the other party in making fi nancial and operating decisions or if the related party entity and another entity are subject to common control.

Where such a situation exists the nature and type of transactions and relationships between parties are disclosed in the notes to the Annual Financial Statements.

Senior Management staff are considered to be Key Management and no transactions take place between these staff members and the ETDP SETA other than the payment of emoluments. No relationship exists between close members of family of Key Management and the ETDP SETA. No loans are made by the ETDP SETA to Key Management.

1.18 Signifi cant adjustments and estimates

In preparing the fi nancial statements, management is required to make estimates and assumptions that affect the amounts represented and the related disclosures. Use of available information and the application of judgement is inherent in the formation of estimates. Actual results in the future may differ from these estimates. These judgements and estimates include:

Impairment testing: Management uses fair value less cost to sell in identifying the assets that may have been impaired.

Provisions: Management uses available information to determine an estimation for provisions. These are measured at management’s best estimate of the expenditure required to settle the obligation at reporting date.

Fair value measurement of revenue and fi nancial instruments: The fair value of fi nancial liabilities for disclosure purposes is estimated by discounting the future contractual cash fl ows at the current market interest rate that is available for ETDP SETA’s similar fi nancial instruments.

1.19 Standards of GRAP not yet effective

The following standards have been approved but are not effective at 31 March 2014:

GRAP 18: Segment Reporting

GRAP 20: Related Party Disclosure

GRAP 105: Transfer of Functions between Entities under Common Control

GRAP 106: Transfer of Functions between Entities not under Common Control

GRAP 107: Mergers



2 ALLOCATION OF NET SURPLUS FOR THE YEAR TO RESERVES:

Administration reserve

Employer grant

reserve

Discretionary reserve

2013/14 2012/13

R’000 R’000 R’000 R’000 R’000

Total revenue 134,884 108,023 208,328 451,235 401,153

Skills development levy: income

Admin levy income (DHET) 37,982 - - 37,982 39,159

Grant levy income (DHET) - 108,023 185,113 293,136 246,978

Skills development levy: penalties and interest

- - 5,429 5,429 3,611

Admin levy - DBE and DHET 93,364 - - 93,364 94,853

QCTO income 1,820 - - 1,820 -

Investment income - - 17,786 17,786 16,100

Other income 1,718 - - 1,718 452

Total expenses 116,440 85,157 169,224 370,821 341,470

Administration expenses 115,930 - - 115,930 101,913

QCTO expense 510 - - 510 -

Employer grants and project expenses - 85,157 136,096 221,253 239,557

FET Infrastructure Funding expense - - 33,128 33,128 -

Net surplus per Statement of Financial Performance 18,444 22,866 39,104 80,414 59,683

Project expense is recognised when the training has been delivered in accordance with the contract. These relate to the portfolio of evidence, uploading of learners onto the learner data base and certifi cation. Due to possibility of learner drop-outs and the uncertainty around the time by which a training provider will contractually be able to provide a portfolio of evidence of the successful completion of training, no accruals or provisions are made in the fi nancial statements. Instead, the funds are reported as commitments.



2013/14 2012/13

R’000 R’000

3 NON-EXCHANGE SKILLS DEVELOPMENT LEVY INCOME

The total levy income per the Statement of Financial Performance is as follows:

Levy income: Administration 131,346 134,012

Levies received 131,346 134,012

Levies received from levy payers 37,982 39,159

Government levies received 93,364 94,853

Inter SETA transfers in - 1

Inter SETA transfers out - -1

Levy income: Employer Grants 108,023 178,838



Inter SETA transfers in - 6


Levy income: Discretionary Grants 185,113 68,140



Inter SETA transfers in 1 2


424,482 380,990

4 INVESTMENT INCOME FROM EXCHANGE TRANSACTIONS

Interest income

Accrued 228 252

Bank deposits 17,558 15,848

17,786 16,100



2013/14 2012/13

R’000 R’000

5 OTHER INCOME FROM EXCHANGE TRANSACTIONS

Mandatory grants received 145 177

Insurance recoveries - 22

Profi t on disposal of assets - 60

NSF Funding returned - 193

Discounting of Long term FET Infrastructure Payable 1,573 -

1,718 452

6 MANDATORY AND DISCRETIONARY GRANTS

Mandatory grants 85,157 138,742

Disbursements 76,841 112,861

Accruals raised 8,316 25,881

Discretionary grants and projects 136,096 100,815

Disbursements 128,321 90,962

Accruals raised 7,775 9,853

221,253 239,557

6.1 Discretionary expenditure consists of:

Direct project costs 136,096 100,815

136,096 100,815



7 ADMINISTRATION EXPENSES

2013/14 2012/13

Note R’000 R’000

Asset related costs

Depreciation 2,333 534

current year 2,427 1,753

due to change in estimate --94 -1,219

Amortisation -539 -78

current year 220 235

Due to change in estimate -759 -313

Loss on disposal of property, plant and equipment 15 -

Building related costs

Operating rentals - buildings 9,753 9,124

Security and cleaning 1,256 1,218

Water and electricity 1,871 1,419

Outside consultants costs

Consultancy and service provider fees 2,864 1,670

Remuneration to members of the audit committee 168 108

Meeting and board fees 1,396 994

Auditors’ remuneration 2,710 1,867

External audit fees 2,210 1,368

Internal audit fees 500 499

Staff related costs

Cost of employment 7.1 55,854 47,092

Staff training and development 1,570 1,498

Recruitment 542 875

Stationery and consumables 801 559

Other administration costs

Maintenance and repairs 3,668 2,708

Advertising, marketing and promotions, communication 5,886 1,968

Legal fees 1,217 1,858

Travel and subsistence 12,185 10,619

Courier fees 789 1,127

Hire of equipment 2,751 1,556

Insurance 569 522

Bank charges 181 188

SETA Conference 7.2 - 2,730

Workshops and AGM 3,032 5,717

Staff relocation 1,201 1,409

Printing and postage 144 182

Refreshments and catering 1,613 1,271

Telephone and cellular phone 1,767 1,622

Other 333 638

Total per Statement of Financial Performance 115,930 101,913



2013/14 2012/13

R’000 R’000

7.1 Cost of employment

Salaries and wages 51,755 43,533

Basic salaries 46,009 39,954

Pension contributions: employee 2,436 2,106

Non-pensionable allowance 828 1,312

Leave payments 2,479 160

Overtime payments 3 -

Employer contributions 4,099 3,558

Medical aid contributions 1,472 1,289

Pension contributions: defi ned contribution plan 2,436 2,106

UIF 191 163

55,854 47,092

Allocation of cost of employment

Administration expenses 55,854 47,092

Number of employees 107 104

7.2 The ETDP SETA conference takes place biennially.

The next conference will take place in the 2014/15 fi nancial year.

8 FET INFRASTRUCTURE FUNDING EXPENSE

Expensed during the year 33 128 -

33 128 -



9 PROPERTY, PLANT AND EQUIPMENT

FOR THE YEAR ENDED 31 MARCH 2014

Cost Accumulated depreciation/ impairment

Closing carrying amount

R’000 R’000 R’000

ETDP SETA assets

Computer equipment 5,302 -3,136 2 166

Offi ce furniture and fi ttings 5,126 -2,373 2 753

Offi ce equipment 1,328 -779 549

Audio-visual equipment 473 -225 248

Kitchen equipment 66 -36 30

Leasehold improvements 1,826 -717 1 109

Motor vehicle 428 -319 109

Minor assets 388 -324 64

Balance at end of year 14 937 -7,909 7 028


Cost Accumulated depreciation/ impairment


R’000 R’000 R’000

ETDP SETA assets

Computer equipment 3,961 -2,061 1 900

Offi ce furniture and fi ttings 4,262 -1,797 2 465

Offi ce equipment 1,305 -579 726

Audio-visual equipment 473 -148 325

Kitchen equipment 66 -26 40

Leasehold improvements 1,826 -440 1 386

Motor vehicle 428 -262 166

Minor assets 381 -280 101

Balance at end of year 12,703 -5,593 7,109

There is no property, plant and equipment that is pledged as security.



9 PROPERTY, PLANT AND EQUIPMENT (continued)

Carrying amount 2013

Additions at cost

Disposals at net book

value

Depreciation Depreciation change in estimate


Movement summary 2013/14 R’000 R’000 R’000 R’000 R’000 R’000

ETDP SETA assets

Computer equipment 1,900 1,375 -15 -1,144 50 2,166

Offi ce furniture and fi ttings 2,465 864 - -599 23 2,753

Offi ce equipment 726 21 - -216 18 549

Audio-visual equipment 325 - - -80 3 248

Kitchen equipment 40 - - -10 - 30

Leasehold improvements 1,386 - - -277 - 1,109

Motor vehicle 166 - - -57 - 109

Minor assets 101 7 - -44 - 64

Balance at end of year 7,109 2,267 -15 -2,427 94 7,028


Additions at cost


value

Depreciation Depreciation change in estimate



ETDP SETA assets

Computer equipment 1,307 856 -9 -720 466 1,900

Offi ce furniture and fi ttings 1,234 1,199 -1 -436 469 2,465

Offi ce equipment 460 272 -5 -177 176 726

Audio-visual equipment 72 274 -3 -46 28 325

Kitchen equipment 31 11 - -9 7 40

Leasehold improvements 874 774 - -269 7 1,386

Motor vehicle 226 - -2 -57 -1 166

Minor assets 62 14 -3 -40 68 101

Balance at end of year 4,266 3,400 -23 -1,753 1,219 7,109



10 INTANGIBLE ASSETS


Cost Accumulated amortisation


R’000 R’000 R’000

ETDP SETA assets

Computer software 2,688 -1,758 930

2,688 -1,758 930


Cost Accumulated amortisation


R’000 R’000 R’000

ETDP SETA assets

Computer software 2,659 -2,297 362

2,659 -2,297 362


Additions at cost


value

Amortisation Amortisation change in estimate



ETDP SETA assets

Computer software 362 29 - -220 759 930

362 29 - -220 759 930


Additions at cost


value

Amortisation Amortisation change in estimate



ETDP SETA assets

Computer software 229 55 - -235 313 362

229 55 - -235 313 362



2013/14 2012/13

Note R’000 R’000

11 CONSUMABLES

Consumables* 486 168

486 168

* This balance has been reallocated from accounts receivable from exchange transactions, where it was disclosed in the prior year.

12 ACCOUNTS RECEIVABLE FROM NON-EXCHANGE TRANSACTIONS

Employer receivables 12.1 2,162 8,019

less : provision for doubtful receivables -149 -148

Staff debtors 21 14

Inter SETA transfers receivable 1 -

2,035 7,885

12.1 Employer Receivable

Grants overpaid due to SARS reversals

Opening balance 8,019 3,504

Realised during the year -6,061 -3,541

Charged to income 204 8,056

Closing balance 2,162 8,019

13 ACCOUNTS RECEIVABLE FROM EXCHANGE TRANSACTIONS

Deposits 2,262 2,215

Interest receivable 228 252

Sundry receivables 725 680

less : provision for doubtful receivables -680 -680

2,535 2,467

14 CASH AND CASH EQUIVALENTS

Cash at bank and on hand 89,921 27,749

Cash at bank 89,901 27,727

Cash on hand 20 22

Short term investments 364,895 342,760

Cash and cash equivalents at end of year 454,816 370,509



The security of cash and cash equivalents is ensured by only contracting with the top four fi nancial institutions, as prescribed by National Treasury. The carrying value, at which cash and cash equivalents are disclosed, approximates their fair values.

As required in National Treasury regulation 31.2, National Treasury approved the banks where the bank accounts are held. The weighted average interest rate on short term bank deposits was 5.06% (Prior year 5.18%).

2013/14 2012/13

Note R’000 R’000

15 ACCOUNTS PAYABLE FROM NON-EXCHANGE TRANSACTIONS

Skills development grants payable 15.1 12,201 33,102

Levies refundable to small employers 15.2 1,841 683

Levies refundable to SARS - 13,888

Liability resulting from straight line valuation of leases 1,814 1,281

15,856 48,954

15.1 Skills development grants payable

Opening carrying amount 33 102 15,879

Amounts utilised during the year -33,102 -7,797

Charged to income during the year 12,201 25,020

Closing carrying amount 12,201 33,102

15.2 Levies refundable to small employers

Small employers who have been exempted from from the payment ofskills development levies but have made payments in error.

Opening balance 683 589

Charged to income during the year 1,158 308

Refunded during the year - -214

Closing balance 1,841 683

16 ACCOUNTS PAYABLE FROM EXCHANGE TRANSACTIONS

Project creditors 7,775 9,853

Trade payables 3,595 3,284

Provision for legal costs - 450

Other accrued expenses 5,750 3,221

17,120 16,808



17 FET INFRASTRUCTURE FUNDING PAYABLE

Payable:

Not later than one year 18,405 -

Later than one year and not later than fi ve years 13,151 -

31,556 -

18 ACCRUED EMPLOYEE ENTITLEMENTS

Employee leave

R’000

Employee bonusR’000

2013/14

R’000

2012/13

R’000

Opening carrying amount 2 577 1 848 4 425 4 427

Amounts utilised during the year -2,483 -2,291 -4,774 -4,537

Charged to income during the year 2,959 1,962 4 921 4,535

Closing carrying amount 3,053 1,519 4,572 4,425

The liability for the payment of leave pay is accrued and is calculated as number of leave days accumulated at the daily pay rate per payroll.

An accrual is made for the payment of a 13th Cheque at the end of November for those employees who have opted to take a 13th Cheque and is calculated each month as the number of employees involved times one-twelfth of their 13th Cheque. This is accumulated to date of payment.

19 RECONCILIATION OF NET CASH FLOW FROM NET SURPLUS TO NET CASH INFLOW FROM OPERATIONS

2013/14 2012/13

R’000 R’000

Net surplus as per Statement of Financial Performance 80,414 59,683

Adjusted for non-cash items:

Depreciation / Amortisation 1,794 456

Profi t/(loss) on disposal of property, plant and equipment 15 -60

FET Infrastructure funding 33,128 -

Increase / (decrease) in accrued employee entitlements 147 -2

Prior year error - -578

Other income: Discounting of liabilities -1,573 384

Increase in special project funding - 25

Investment income -17,810 -16,042

Adjusted for working capital changes:

Increase in receivables 5,782 -3,386

(Decrease) / increase in payables -32,787 32,673

Net cash infl ow from operations 69,110 73,153



20 COMMITMENTS

20.1 Discretionary reserve

Of the balance of R367.9 million available in the Discretionary reserve at the end of March 2014, the commitments detailed below of R239.4 million have been made for projects and skills priorities. Expenses that relate to these commitments are included in grant expenses in the Statement of Financial Performance. A request for the accumulation of these funds has been made to National Treasury.

Opening Commitments01 April 2013

Adjustments 2013/14

New contracts 2013/14

Expenditure 2013/14

Balance of commitments

31 March 2014

R’000 R’000 R’000 R’000 R’000

PROGRAMME 1

ETDP SETA constituents submit quality WSPs/ATRs

- - 650 3 647

Scarce and Critical Skills Guide developed - - 179 - 179

Learner Tracking and Tracing Study 389 -4 769 385 769

Annual Stakeholder Satisfaction Survey conducted

- - 50 37 13

An Impact Study on ETDP SETA Programmes conducted

- - 1,246 1,246 -

Development of SSP 350 - - 350 -

739 -4 2,894 2,021 1,608

PROGRAMME 2

Lecturers trained on the PIVOTAL programmes 1,876 -606 6,000 1,823 5,447

Managers capacitated on Leadership and Management Programmes

1,754 -449 2,715 2,422 1,598

Lecturers supported to gain industry exposure and experience (WIL)

2,314 -780 3,738 1,245 4,028

FET lecturers trained as coaches, assessors and moderators

- - 1,433 409 1,024

Career development support 3,732 -397 14,000 14,499 2,836

9,676 -2,232 27,886 20,397 14,933




Adjustments 2013/14


Expenditure 2013/14


31 March 2014

R’000 R’000 R’000 R’000 R’000

PROGRAMME 3

Grades 10-12 teachers capacitated in content knowledge and pedagogy

10,864 -845 9,523 9,154 10,388

Grades 10-12 teachers capacitated in end user computing

- - 9,320 924 8,396

Grades 7-9 teachers capacitated in subject content and methodology

2,751 -82 8,309 2,827 8,151

Support for teachers in LSEN schools - - 8,600 283 8,317

B.Ed/PGCE school-based teacher training and development - new intake

4,448 -1,156 7,430 3,399 7,323

Mentor coaches homework support 750 -79 - 671 -

Support for SMT and district personnel in Management and Leadership

3,811 -472 15,610 3,721 15,229

Support one national initiative (DBE/DHET) related to teacher development

1,039 -1,039 1,122 - 1,122

23,663 -3,673 59,915 20,979 58,926

PROGRAMME 4

Learner and Student Career Guides revised and Worker Guide developed

- - 18 14 4

Career Guides printed and distributed - - 365 - 365

Full qualifi cations (degree) - bursaries renewed annually

1,231 -727 25,390 15,919 9,975

Full qualifi cations bursaries - fi rst/new intake 6,706 -5,488 9,000 10,174 44

New bursaries - full qualifi cation diploma/higher certifi cate

- - 5,000 5,000 -

New bursaries - full qualifi cation honours - - 750 750 -

New bursaries - full qualifi cation masters - - 700 700 -

New bursaries - full qualifi cation Ph.D/Doctoral

- - 550 550 -

NC(V) programmes 392 - - 369 22

NATED programmes 464 -347 - 117 -

FET (workplace experience) 6,091 -2,860 9,863 7,131 5,962

UoTs (workplace experience) - - 6,730 2,758 3,972

Second chance/Grade 12 rewrite programme

- - 3,919 360 3,559

14,884 -9,422 62,284 43,843 23,903




Adjustments 2013/14


Expenditure 2013/14


31 March 2014

R’000 R’000 R’000 R’000 R’000

PROGRAMME 5

Internships for people with NSC/NC(V) certifi cates

8,263 -2,329 2,826 1,347 7,413

Internships for graduates - diplomas/certifi cates

23,136 -3,525 3,804 14,804 8,611

Internships for graduates 208 -1,603 14,712 1,169 12,148

ECD Level 4 704 -25 43,540 6,448 37,770

Youth development Level 4 - -3 750 674 73

ECD Level 5 3,680 - 31,939 7,286 28,333

Skills Programmes - part qualifi cations - -81 3,627 419 3,127

35,991 -7,567 101,198 32,148 97,475

PROGRAMME 6

Support for Trade Union Benefi ciaries 8,704 -3,584 3,857 3,915 5,062

Support for Political Parties Benefi ciaries 1,099 -658 1,092 441 1,092

Support for NPOs Benefi ciaries 675 -407 2,307 167 2,408

Support for Private Providers through APPETD 240 - 975 33 1,182

Support for Independent Schools Benefi ciaries - NAISA

3,497 -1,242 3,000 2,057 3,198

Support for HESA 3,741 -1,466 800 1,845 1,231

Support for HEIs - - 9,410 150 9,260

SDF Forums 491 - 492 926 57

Support for Research Organisations 702 -59 1,839 755 1,727

Support for SGB Benefi ciaries 4,617 -2,002 2,809 3,020 2,405

Support for LIASA 116 -24 1,000 92 1,000

Support for Teacher Unions Benefi ciaries 2,326 - 7,234 2,117 7,444

26,208 -9,442 34,816 15,517 36,065




Adjustments 2013/14


Expenditure 2013/14


31 March 2014

R’000 R’000 R’000 R’000 R’000

PROGRAMME 7

SLA with QCTO as AQP and setting up of assessment centres

- - 2,383 769 1,614

Support for TVET OECD Ministerial Review Project

- - 3,000 - 3,000

Occupational qualifi cations developed and completed

- - 824 - 824

RPL centres set up - - 1,000 126 874

Strengthening of QA and improving M&E for impact

642 -346 - 297 -

The ETDP SETA supports the DHET’s ABET sub-sector re-engineering

- - 206 - 206

642 -346 7,413 1,192 6,518

Total 111,805 -32,685 296,405 136,096 239,428

In addition to the commitments of R239.4 million which is supported by signed contracts, the Board approved additional funds of R290.4 million, via a budgeting process, in order to fund more programmes in the 2014/15 fi nancial year.

Summary of total funding commitments

2013/14

R’000

Discretionary reserves per statement of fi nancial position 367,902

Contracted funding per above table -239,428

Committed in 2014/15 budget -290,386

Funded by future revenue * -161,912

* The Grants Regulations effective 01 April 2013 allow for discretionary income received during the fi nancial year to be utilised for discretionary programmes in the same year.



2013/14 2012/13

R’000 R’000

20.2 Administration reserve

Reserve retained to cover the carrying values of property, plant and equipment/Intangible assets which will be depreciated in future years. 7,958 7,471

20.3 Total of future minimum lease payments under non-cancellable leases:

20.3.1 Operating Leases

Buildings

Not later than one year 10,021 8,584

Later than one year and not later than fi ve years 13,690 17,977

23,711 26,561

Details of operating lease agreements:

Geographic area ServiceCommencement

dateTermination

dateOption to

renew the leaseEscalation

% p.a.

Bedfordview, Johannesburg Rental 17 October 2011 30 June 2016 Yes 8

Nelspruit Rental 01 May 2011 30 June 2016 Yes 8.5

Potchefstroom Rental 01 June 2011 30 June 2016 Yes 8

Kimberley Rental 01 July 2011 30 June 2016 Yes 8

East London Rental 01 July 2013 30 June 2016 No 10

Cape Town Rental 01 August 2011 30 June 2016 No 9

Durban Rental 01 October 2013 30 June 2016 Yes 10

Polokwane Rental 01 December 2011 30 June 2016 Yes 8

Bloemfontein Rental 01 October 2012 30 June 2016 Yes 8

Braamfontein, Johannesburg Rental 01 August 2012 30 June 2016 Yes 10



2013/14 2012/13

R’000 R’000

21 CONTINGENCIES

CONTINGENT LIABILITY

The National Treasury has been requested to approve the accumulation of reserves at 31 March 2014. At the reporting date no response had yet been received 367,902 -

367,902 -

22 RISK MANAGEMENT

22.1 General

In the course of its operations, the ETDP SETA is exposed to interest rate, liquidity risk and market risk. In order to monitor these risks, the ETDP SETA has developed a risk management strategy in terms of Treasury Regulation 28.1. Below is the ETDP SETA’s risk management process.

22.2 Operational risk

Operational risk is the risk of loss arising from system failure, human error or external events. When controls fail to perform, operational risk can cause damage to reputation, have legal or regulatory implications or can lead to fi nancial loss.The ETDP SETA cannot expect to eliminate all operational risks, but by initiating a rigorous control framework and by monitoring and responding to potential risk, the ETDP SETA is able to manage risk. Controls include effective segregation of duties, monitoring, authorisation, reconciliation, staff education and risk assessment processes.

22.3 Liquidity risk

This risk is managed via proper working capital management, expenditure management, actual versus forecast cash fl ows and the cash management policy. Adequate reserves in support of existing commitments and liquid resources are maintained.The table below provides an analysis of ETDP SETA’s fi nancial liabilities into their maturity groupings as per the Statement of Financial Position.

Not later than one month

Later than one month but not later than three months

Later than three months but not

later than one year

Later than one year but not later than fi ve years

R’000 R’000 R’000 R’000

March 2014

Trade and other payables 17,120 16,025 18,405 13,151

Not later than one month

Later than one month but not later than three months

Later than three months but not

later than one year

Later than one year but not later than fi ve years

R’000 R’000 R’000 R’000

March 2013

Trade and other payables 16,808 46,990 706 1,258



22.4 Interest risk

ETDP SETA manages its interest risk by spreading its funds over the four major banks in which it uses current account, call account and short term investments. A cash management system is used for monitoring bank balances. The sensitivity of surplus funds to interest rates is dependent on the prime rates variations. At the reporting date, the prime rate was 9.0% (Prior year: 8.5%).

Floating rate Non-interest

bearing Amount R’000

Total R’000

Amount R’000

Effective interest rate % p.a.


Financial assets

Cash 454,796 5.06 20 454,816

Accounts receivable 2,535 2,035 4,570

Total fi nancial assets 457,331 2,055 459,386

Financial liabilities

Accounts payable -17,120 -51,984 -69,104

Total fi nancial liabilities -17,120 -51,984 -69,104


Financial assets

Cash 370,487 5.18 22 370,509

Accounts receivable 2,635 7,885 10,520

Total fi nancial assets 373,121 7,907 381,029

Financial liabilities

Accounts payable -16,808 -53,379 -70,187

Total fi nancial liabilities -16,808 -53,379 -70,187

22.5 Credit risk

Financial assets which potentially subject ETDP SETA to the risk of non-performance by counter parties and thereby to concentration of credit risk, consist mainly of cash and cash equivalents and accounts receivable. Except for the global economic meltdown which may impact on the income received from the levy paying organisations, no events occurred during the year that may impact on the accounts receivable.

The ETDP SETA management limits its treasury counter-party exposure by only dealing with well-established fi nancial institutions approved by National Treasury through the approval of their investment policy in terms of Treasury Regulation 31.2. The ETDP SETA’s exposure is continuously monitored by a Finance Committee convened in accordance with the PFMA.

Credit risk with respect to levy paying employers is limited due to the nature of the income received. The ETDP SETA does not have any material exposure to any individual or counter-party. The ETDP SETA’s concentration of credit risk is limited to the Education, Training and Development industry in which the ETDP SETA operates. No events occurred in the industry during the fi nancial year that may have an impact on the accounts receivable that has not been adequately provided for. Accounts receivable are presented net of allowance for doubtful debt where applicable.



22.6 Market risk

The ETDP SETA is exposed to fl uctuations in the employment market; for example, sudden increases in unemployment and changes in the wage rates. No signifi cant events occurred during the year that the ETDP SETA is aware of.

Fair values

The ETDP SETA’s fi nancial instruments consist mainly of cash and cash equivalents, account and other receivables, and account and other payables. No fi nancial instruments were carried at an amount in excess of their fair value. The following methods and assumptions are used to determine the fair value of each class of fi nancial instrument:

No fi nancial asset or liability was carried at an amount in excess of its fair value and fair values could be reliably measured for all fi nancial instruments.

23 GOING CONCERN

The going concern status of the ETDP SETA is dependant on the SETA re-registration by the Department of Higher Education and Training. The current registration expires on 31 March 2016.

24 RELATED PARTY TRANSACTIONS

24.1 Transactions with other SETAs

Inter-SETA transactions arise due to the movement of employers from one SETA to another. No other transactions occurred during the year with other SETAs.

All transactions were at arm’s length.

The parent entity of all SETAs is the Department of Higher Education and Training.

2013/14 2012/13

R’000 R’000

Amount of the transaction

Amount receivable/(payable)

Amount of the transaction

Amount receivable/(payable)

Received - 1 9 -

SERVICES SETA - 1 - -

MICT SETA - - 9 -

Paid - - -6 -

MICT SETA - - -2 -

AGRISETA - - -4 -

Total - 1 3 -



24.2 Transactions with other related parties

The ETDP SETA recognises that related party transactions can present potential or actual confl icts of interest, it is therefore the policy of the ETDP SETA that at the time of evaluating contractual engagements the contracting parties are requested to provide evidence of company registrations and ownership/directorship. All the stakeholders are also requested to declare their interests prior to start of all offi cial meetings.

All transactions were at arms length. The providers are not related parties but they are disclosed as additional information to the user.

Related party Nature of relationship

Transaction type Amount of the

transaction

Amount payable

Amount of the

transaction

Amount payable

Payables

HESA Levy payer Mandatory grant 650 - 300 6

NEHAWU Levy payer Mandatory grant 47 - 204 71

SADTU Levy payer Mandatory grant 72 - 98 32

NAPTOSA Levy payer Mandatory grant 126 - 45 14

NAPTOSA Levy payer Discretionary grant - - 252 -

APPETD Levy payer Discretionary grant 656 - 250 656

Tlokwe Municipality Public entity Service provider 34 - 33 6

Sol Plaatjie Municipality Public entity Service provider 36 - 34 -

Polokwane Municipality Public entity Service provider 12 - 4 -

SARS Public entity Taxation 14,527 1,012 12,161 -

SA Post Offi ce Public entity Service provider 9 - - 9

SABC Public entity Service provider 5 2 3 -

SAQA Public entity Discretionary grant 120 67 167 -

SAA Public entity Service provider 6,317 - 6,941 -

The Auditor-General Public entity Service provider 1,714 56 1,529 67

Telkom SA Public entity Service provider 1,551 118 1,362 -



2013/14 2012/13

Note R’000 R’000

25 CHANGE IN ESTIMATES

In terms of the requirements of IAS16 the useful lives of assets were reviewed at year end. Where the remaining useful life expectations of certain assets differ from previous estimates, an adjustment for an over or underestimation is processed in the asset register.

9 852 1,532

26 EVENTS AFTER THE REPORTING DATE

No signifi cant events occurred after the reporting date which required further disclosure in the annual fi nancial statements.

27 PRIOR PERIOD ERROR

27.1 During the fi nancial year ended 31 March 2013, an error was discovered in the application of the total cost to company concept of salary payment relating to UIF deductions. Employer contributions were deducted from salary packages in error. The error covered a period of fi ve years. The error was corrected in the current year but highlighted errors of disclosure made in prior years. In order to correct misstatements in prior years, the following restatements were made to comparative disclosures:

Reserves

Opening balance - 259,209

Administration expenses - -578

Restated balances per Statement of Changes in Net Assets - 258,631

28 IRREGULAR, FRUITLESS AND WASTEFUL EXPENDITURE

FRUITLESS AND WASTEFUL EXPENDITURE

Incident Decision

Storage costs were incurred unnecessarily.

The decision to store goods was made under pressure and it was only determined at a later date that this cost could have been avoided, had things been done differently.

- 50

IRREGULAR EXPENDITURE

Incident Decision

Business conducted with blacklisted supplier

A business transaction conducted with ADD X Trading 353, a supplier that is listed on the prohibited supplier list with the National Treasury.

31 -



29 STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS

2013/14 2013/14 2013/14 2013/14

Initial Budget Final Budget Actual Variance

R’000 R’000 R’000 R’000

REVENUE

Skills Development Levy: income 394,338 394,338 429,911 35,573

QCTO income 1,843 1,843 1,820 -23

Investment income 8,102 8,102 17,786 9,684

Other income - - 1,718 1,718

Total revenue 404,283 404,283 451,235 46,952

EXPENSES

Administration expenses -131,089 -131,089 -115,930 15,159

QCTO expense -508 -508 -510 -2

Employer grants -55,290 -55,290 -85,157 -29,867

Discretionary grants -408,357 -408,357 -136,096 272,261

FET Infrastructure Funding expense - - -33,128 -33,128

Total expenses -595,244 -595,244 -370,821 224,423

Net surplus/(defi cit) for the year -190,961 -190,961 80,414 271,375



Administration expenses

2013/14Initial Budget

R’000

2013/14Adjustments

R’000

2013/14Final Budget

R’000

2013/14 Actual R’000

2013/14 Variance

R’000

Advertising and promotions 6,390 500 6,890 5,886 1,004

Audit fees 3,314 -500 2,814 2,710 104

Bank charges 232 - 232 181 51

Board and meeting fees 1,324 577 1,901 1,564 337

Cellphone 591 -200 391 306 85

Consulting fees * 6,755 893 7,648 2,864 4,784

Consumables 1,363 -1,045 318 266 52

Depreciation/amortisation 857 2,000 2,857 1,796 1,061

Doubtful receivables - - - 4 -4

Electricity and water 1,797 500 2,297 1,871 426

Finance charges 835 -835 - - -

Legal fees 1,686 - 1,686 1,217 469

Loss on disposal of assets - - 15 -15

Hire of equipment 2,323 - 2,323 2,751 -428

Insurance 600 - 600 569 31

IT maintenance and licences 4,960 -1,700 3,260 3,030 230

Motor vehicle expenses 93 - 93 16 77

Postage,printing and courier 2,773 -1,010 1,763 933 830

Records and data maintenance 1,485 -100 1,385 112 1,273

Recruitment expenses 700 - 700 542 158

Relocation of staff 1,543 500 2,043 1,201 842

Repairs and maintenance 457 300 757 623 134

Refreshments and catering 1,597 56 1,653 1,613 40

Rent 9,377 800 10,177 9,753 424

Security and cleaning 1,688 -300 1,388 1,256 132

Salaries and benefi ts 56,262 935 57,197 55,854 1,343

Seminars and conferences 2,505 -500 2,005 1,781 224

Subscriptions 92 - 92 74 18

Staff training 2,730 -970 1,760 1,570 190

Staff wellness 260 -100 160 140 20

Stationery 677 - 677 535 142

Telephone and fax 2,047 -500 1,547 1,461 86

Travel and accommodation 13,015 999 14,014 12,185 1,829

Venue Hire 761 -300 461 1,251 -790

131,089 - 131,089 115,930 15,159

* Consulting Fees includes Research expenses defi ned as administration costs in terms of the Grant Regulations effective 01 April 2013.



Explanation of material variances between actual results and approved budget

Levies

Skills development levy income is 9% above budget due to new organisations entering the sector and increased level of salaries.

Investment income

Investment income is at 219% of the budget due to higher than expected cash balances throughout the fi nancial year. Process delays resulted in commitments not realising as cash payments.

Other income

This is represented by mandatory grant accruals made internally.

Administration expenses

Advertising and Promotions has not been spent in the year due to revised marketing planning strategy. The next year will see expansion of this area in the organisation.

Consulting fees are underspent due to the inability to commit funds in time make cash payments. The contracting for Research Chairs proved complicated and needed to be reworked.

IT Maintenance and Licences was underspent due to the late take-off of the Management Information System which will be completed in the next fi nancial year.

Records and Data Management did not spend the budget as the electronic data storage planned was taken into the Management Information System.

Travel and accommodation was underspent due to the timing of the rollout of projects in the fi nancial year and reduction in governance meetings.

Mandatory grants

Grants paid are 54% above budget due to higher levy income received and greater participation by member organisations. Grants in the early part of the year were paid at the higher rate as they still fell under the prior scheme year and hence the old grant regulations.

Discretionary grants

Discretionary grants are 66.7% underspent for the year. The payment of discretionary grants is dependent on the timing of the mix of programmes implemented in the year. Some projects will only become payable as deliverables are made available in the new year and some projects from the prior year are settled in the current year. Although a great many projects have been commited contractually in the year, it has not been possible to implement them early enough to make all the cash payments that were expected.


NOTES

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