JOHANNESBURG Tel no: 011 234 2311 Fax no: 011 234 2350 Address: Tuscany Office Park , Building 2, Coombe Place, Rivonia, Sandton, 2128DURBAN Tel no: 031 566 2790 Fax no; 031 566 1874 Address: Suite 1, EOH Mthombo, 6 rydallvale Park, La Lucia Ridge, 4319

CAPE TOWN Tel no: 021 910 3001 Fax no: 021 910 3080 Address: 7 th Floor, Manhattan Plaza, 100 Edward Street, Tygervalley, Bellville, 7530

2008/2009 Annual Report

Labour Portfolio Committee Session

10 November 2009

Overview• Background

• 2008/9 Developments

• Performance against 2008-2009 SLA

• Financial Performance

• Cash Resources

• Audit Findings

• Challenges

• Training Lay-off Scheme

• Impact of Skills Development

JOHANNESBURG Tel no: 011 234 2311 Fax no: 011 234 2350 Address: Tuscany Office Park , Building 2, Coombe Place, Rivonia, Sandton, 2128DURBAN Tel no: 031 566 2790 Fax no; 031 566 1874 Address: Suite 1, EOH Mthombo, 6 rydallvale Park, La Lucia Ridge, 4319

CAPE TOWN Tel no: 021 910 3001 Fax no: 021 910 3080 Address: 7 th Floor, Manhattan Plaza, 100 Edward Street, Tygervalley, Bellville, 7530

• Accounting Authority appointed in April 2008.

• Mechanisms for good corporate governance put in place.

• Executive Management Team appointed.

• New organizational structure implemented in July 2008.

• Strategic plan developed to , inter alia, curb over-expenditure, improve

performance and enhance compliance.

Background

JOHANNESBURG Tel no: 011 234 2311 Fax no: 011 234 2350 Address: Tuscany Office Park , Building 2, Coombe Place, Rivonia, Sandton, 2128DURBAN Tel no: 031 566 2790 Fax no; 031 566 1874 Address: Suite 1, EOH Mthombo, 6 rydallvale Park, La Lucia Ridge, 4319

CAPE TOWN Tel no: 021 910 3001 Fax no: 021 910 3080 Address: 7 th Floor, Manhattan Plaza, 100 Edward Street, Tygervalley, Bellville, 7530

• Compliance with AGSA, Dept of Labour and SAQA requirements.

• Impact of strict financial controls on over-expenditure.

• R38 million DG Call.

• Mandatory Grant payment backlog eradicated.

• R28,5 million disbursed against pre – 2008/9 projects.

• Strides made on provider accreditation and learner achievement.

2008/9 Achievements

JOHANNESBURG Tel no: 011 234 2311 Fax no: 011 234 2350 Address: Tuscany Office Park , Building 2, Coombe Place, Rivonia, Sandton, 2128DURBAN Tel no: 031 566 2790 Fax no; 031 566 1874 Address: Suite 1, EOHMthombo, 6 rydallvale Park, La Lucia Ridge, 4319

CAPE TOWN Tel no: 021 910 3001 Fax no: 021 910 3080 Address: 7 th Floor, Manhattan Plaza, 100 Edward Street, Tygervalley, Bellville, 7530

Performance against 2008-9 SLA

NSDS Indicator2008/2009

TargetsAchieved Variance

1.1 SSP Annual update Achieved None

1.2 Training on SDF guide

250 156 -94

2.5 BEE firms and Co-ops 104 14 -90

2.7 ABET: Entered 510 1033 523

ABET: Completed 255 549 294

2.8 Employed: Entered 650 669 19

Employed : Completed

640 717 77

JOHANNESBURG Tel no: 011 234 2311 Fax no: 011 234 2350 Address: Tuscany Office Park , Building 2, Coombe Place, Rivonia, Sandton, 2128DURBAN Tel no: 031 566 2790 Fax no; 031 566 1874 Address: Suite 1, EOHMthombo, 6 rydallvale Park, La Lucia Ridge, 4319

CAPE TOWN Tel no: 021 910 3001 Fax no: 021 910 3080 Address: 7 th Floor, Manhattan Plaza, 100 Edward Street, Tygervalley, Bellville, 7530

Performance against 2008-9 SLA

NSDS Indicator2008/2009

TargetsAchieved Variance

3.2 NLPs, NGOs, CBOs & Co-ops

38 18 -20

4.1 Unemployed: Entered 300 1250 950

Unemployed: Completed 150 1504 1354

4.2 FET/HET Workplace Exp. 0 117 117

4.3 NVC: Entered 100 81 -19

NVC: Sustainable Ventures

20 0 -20

5.1 ISOEs 3 3 0

5.2 NVC Training Providers 3 3 0

Financial Performance

Total IncomeAdministration

reserveMandatory

Grants Discretionary

Grants

Total revenue 184 066 19 948 99 591 53 193

Total expenses 132 151 27 561 78 309 14 947

Net surplus/(deficit) 51 915 (7 613) 21 282 38 246

Expenditure as % of revenue 72% 138% 79% 28%

Prior year comparative % 95% 193% 81% 158%

Financial Performance (Cont’d)Record of Surplus/(Deficit )

2006/07 2007/08 2008/09 Comment

Administration (20 738) (16 238) (7 613) Deficit predominantly attributed to completion of Administrator engagements

Discretionary Grants (19 310) (27 687) 38 249 Accounting Authority decision to limit Discretionary Grant allocations to facilitate the correction of prior periods over-commitments

Mandatory Grants 21 776 16 679 21 282 Mandatory Grant surplus is re-directed to Discretionary Grant Reserves annually. These Grants disbursements are currently paid quarterly in compliance with legislation.

Cash Resources

R'000

MAPP-SETA Cash at bank 172 749 MAPPP-SETA current liabilities 33 532

Mandatory grants 24 305 Discretionary grants 3 473 Inter-SETA transfers 216 Administration expenses 5 538

139 217 Provision-refundable to employers under the threshold of R500 000 6 980

132 237 Post-retirement benefit obligations 3 019

129 218 Commitments 94 549

R 34 669

Audit findings based on three factors:

• Inaccuracies of records maintained during 2007/2008 which were highlighted in the Audit Report for the year ended 31 March 2008;

• Inadequate hand-over of the MAPPP-SETA affairs from the Administrator to SETA Management; and

• Initial staff instability during the appointment of the new Accounting Authority.

Significant portion of irregular expenditure of R 4,651m, whilst incurred during 2008/2009 financial year, resulted from service providers engaged by the Administrator prior to completion of their term of office and can thus be considered as a continuation of the costs incurred whilst the SETA was under administration.

Audit findings

Annual General Meeting

• Section 51(1)(a) of the PFMA states that “An Accounting Authority for a public entity must ensure that the public entity has and maintains effective, efficient and transparent systems of financial and risk management and internal control”.

• The SETA is required to provide its stakeholders with information on its progress insofar as financial and non-financial performance.

• The SETA must gain acceptance and approval of its Annual Report from the stakeholders.• To comply with the above, the SETA held an Annual General Meeting on 28th November

2009 to which stakeholders were invited.• The cost of attending to this requirement was R22 681,11 for the hire of the venue

JOHANNESBURG Tel no: 011 234 2311 Fax no: 011 234 2350 Address: Tuscany Office Park , Building 2, Coombe Place, Rivonia, Sandton, 2128DURBAN Tel no: 031 566 2790 Fax no; 031 566 1874 Address: Suite 1, EOH Mthombo, 6 rydallvale Park, La Lucia Ridge, 4319

CAPE TOWN Tel no: 021 910 3001 Fax no: 021 910 3080 Address: 7 th Floor, Manhattan Plaza, 100 Edward Street, Tygervalley, Bellville, 7530

• Communication.

• Battered image.

• Limited revenue.

• Board and staff development.

• Apprenticeship administration.

• Review of trades and qualifications.

• Certification backlog.

Challenges

JOHANNESBURG Tel no: 011 234 2311 Fax no: 011 234 2350 Address: Tuscany Office Park , Building 2, Coombe Place, Rivonia, Sandton, 2128DURBAN Tel no: 031 566 2790 Fax no; 031 566 1874 Address: Suite 1, EOH Mthombo, 6 rydallvale Park, La Lucia Ridge, 4319

CAPE TOWN Tel no: 021 910 3001 Fax no: 021 910 3080 Address: 7 th Floor, Manhattan Plaza, 100 Edward Street, Tygervalley, Bellville, 7530

• R5 million seed funding and infrastructure committed to TLS Project.

• Project Team appointed and project plan put in place.

• Board TLS Task Team appointed to serve a sounding board to the Project Team.

• Service provider to assist with pilot and skills transfer appointed.

• Working relationship established with CCMA and NSF.

• CCMA updates received weekly. To date no companies in our sectors have applied for

enrolment into TLS.

Training Lay-off Scheme

JOHANNESBURG Tel no: 011 234 2311 Fax no: 011 234 2350 Address: Tuscany Office Park , Building 2, Coombe Place, Rivonia, Sandton, 2128DURBAN Tel no: 031 566 2790 Fax no; 031 566 1874 Address: Suite 1, EOH Mthombo, 6 rydallvale Park, La Lucia Ridge, 4319

CAPE TOWN Tel no: 021 910 3001 Fax no: 021 910 3080 Address: 7 th Floor, Manhattan Plaza, 100 Edward Street, Tygervalley, Bellville, 7530

• Research on companies in distress underway to determine required information to feed into

the CCMA process. To this end, following has been done:

Advocacy campaign which commenced on 2 November 2009.

Development of an instrument for measuring the impact of the recession.

A sample of 60 potential participant companies identified for assessment.

Assessment to commence on 5 November 2009.

Training Lay-off Scheme (Cont’d)

JOHANNESBURG Tel no: 011 234 2311 Fax no: 011 234 2350 Address: Tuscany Office Park , Building 2, Coombe Place, Rivonia, Sandton, 2128DURBAN Tel no: 031 566 2790 Fax no; 031 566 1874 Address: Suite 1, EOH Mthombo, 6 rydallvale Park, La Lucia Ridge, 4319

CAPE TOWN Tel no: 021 910 3001 Fax no: 021 910 3080 Address: 7 th Floor, Manhattan Plaza, 100 Edward Street, Tygervalley, Bellville, 7530

• 3850 learners certificated to date for 2005/2009 period.

• The provincial spread of these learners is as follows: Eastern Cape - 436; Gauteng – 1115;

Free State - 58; KwaZulu Natal - 519; Limpopo - 231; Mpumalanga - 265; Northern Cape -

271; North West - 316; Western Cape – 639.

• Verification of results of approximately 2900 learners currently underway after a campaign of

closing a large number of old projects.

• Newly funded projects on course to deliver more learner results in near the future.

Impact of Skills Development

JOHANNESBURG Tel no: 011 234 2311 Fax no: 011 234 2350 Address: Tuscany Office Park , Building 2, Coombe Place, Rivonia, Sandton, 2128DURBAN Tel no: 031 566 2790 Fax no; 031 566 1874 Address: Suite 1, EOH Mthombo, 6 rydallvale Park, La Lucia Ridge, 4319

CAPE TOWN Tel no: 021 910 3001 Fax no: 021 910 3080 Address: 7 th Floor, Manhattan Plaza, 100 Edward Street, Tygervalley, Bellville, 7530

Eastern Cape 436

Gauteng 1115

KZN 519

Free State 58

Limpopo 231

Mpumalanga 265

North West 316

Northen Cape 271

Western Cape 639

Impact of Skills Development

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JOHANNESBURG Tel no: 011 234 2311 Fax no: 011 234 2350 Address: Tuscany Office Park , Building 2, Coombe Place, Rivonia, Sandton, 2128DURBAN Tel no: 031 566 2790 Fax no; 031 566 1874 Address: Suite 1, EOH Mthombo, 6 rydallvale Park, La Lucia Ridge, 4319

CAPE TOWN Tel no: 021 910 3001 Fax no: 021 910 3080 Address: 7 th Floor, Manhattan Plaza, 100 Edward Street, Tygervalley, Bellville, 7530

.

Impact of Skills DevelopmentTitle of Programme Number

1. Bag Making 18

2. Bookbinding Craft Cutting 6

3. Cutting 33

4. Can Making 21

5. Carton Making 33

6. Machine Minding 29

7. Manufacturing Machine Minding 24

8. Finishing Machine Minding 34

9. Electronic Composition 4

10. Electronic Origination 108

JOHANNESBURG Tel no: 011 234 2311 Fax no: 011 234 2350 Address: Tuscany Office Park , Building 2, Coombe Place, Rivonia, Sandton, 2128DURBAN Tel no: 031 566 2790 Fax no; 031 566 1874 Address: Suite 1, EOH Mthombo, 6 rydallvale Park, La Lucia Ridge, 4319

CAPE TOWN Tel no: 021 910 3001 Fax no: 021 910 3080 Address: 7 th Floor, Manhattan Plaza, 100 Edward Street, Tygervalley, Bellville, 7530

.

Impact of Skills DevelopmentTitle of Programme Number

11. End Making 12

12. Gravure 25

13. Gravure Machine Minding 28

14. Gravure Cylinder Processing 14

15. Laminating 6

16. Decorating 14

17. Lithography: Paper Section 201

18. Photo Lithography 5

19. Printers Electrician 13

20. Printers Mechanic 23

JOHANNESBURG Tel no: 011 234 2311 Fax no: 011 234 2350 Address: Tuscany Office Park , Building 2, Coombe Place, Rivonia, Sandton, 2128DURBAN Tel no: 031 566 2790 Fax no; 031 566 1874 Address: Suite 1, EOH Mthombo, 6 rydallvale Park, La Lucia Ridge, 4319

CAPE TOWN Tel no: 021 910 3001 Fax no: 021 910 3080 Address: 7 th Floor, Manhattan Plaza, 100 Edward Street, Tygervalley, Bellville, 7530

.

Impact of Skills Development

Title of Programme Number

21. Roll Label Machine Minding 26

22. Rotary Off-set Machine Minding 169

23. Paper Sack Making 14

24. Flexography 56

25. Ruling - Cutting 3

26. Machine Adjuster 7

27. FETC: Craft Enterprise – NQF 4 23

28. NC: Craft Production – NQF 2 737

29. NC: Craft Operations Management - NQF 5 270

30. NC: Journalism – NQF 5 54

JOHANNESBURG Tel no: 011 234 2311 Fax no: 011 234 2350 Address: Tuscany Office Park , Building 2, Coombe Place, Rivonia, Sandton, 2128DURBAN Tel no: 031 566 2790 Fax no; 031 566 1874 Address: Suite 1, EOH Mthombo, 6 rydallvale Park, La Lucia Ridge, 4319

CAPE TOWN Tel no: 021 910 3001 Fax no: 021 910 3080 Address: 7 th Floor, Manhattan Plaza, 100 Edward Street, Tygervalley, Bellville, 7530

.

Impact of Skills Development

Title of Programme Number

31. FETC: Live Event Technical Production – NQF 4 167

32. FETC: Sound Technology – NQF 4 119

33. FETC: Arts and Culture Administration – NQF 4 163

34. FETC: Craft Enterprise: NQF 4 348

35. FETC: Design Foundation – NQF 4 423

36. FETC: Film and Television – NQF 4 126

37. FETC: Heritage Practice – NQF 4 187

38. NC: Music Industry Sound Technology – NQF 5 202

39. FETC: Performing Arts – NQF 4 102

TOTAL 3850

JOHANNESBURG Tel no: 011 234 2311 Fax no: 011 234 2350 Address: Tuscany Office Park , Building 2, Coombe Place, Rivonia, Sandton, 2128DURBAN Tel no: 031 566 2790 Fax no; 031 566 1874 Address: Suite 1, EOH Mthombo, 6 rydallvale Park, La Lucia Ridge, 4319

CAPE TOWN Tel no: 021 910 3001 Fax no: 021 910 3080 Address: 7 th Floor, Manhattan Plaza, 100 Edward Street, Tygervalley, Bellville, 7530

• Zanele Zondi says: I joined DRAFTFCB as an intern in November 2007 … I worked on brands such as Eskom, Toyota, SABC… I have since been working on more brands such as Lexus, City Press, Sportstake, Adcock Ingram, Tiger Brands, FNB . I was fortunate enough to win myself a silver Loerie Award this year.

• Feziwe Tobi and Ncediswa Makuleni are running their own production house called Alpine Media with exclusive rights for making music videos as well as filming live performances for Hidden Prospects, a private music label producing 10 Digits (a hip hop group) in Uitenhage.

• 5 learners, Yvonne , Phumla, Ncumisa, Mantombi, and Nomfundo got together to form their own clothing and design business called Abenzi Clothing. These learners were on the Craft Enterprise and Craft Operations Management learnerships last year. ATI provided them space for about 6 months to start-up their business. Thereafter they moved to their own offices in North End. They are making casual wear ,bedding, curtains and African wear for all age groups.

Impact of Skills Development (Cont’d)

Thank You!!!