Parliamentary Portfolio Committee

Annual Report 2012/13

Services SETA

Table of Contents:• Strategic Support• Quality Management

Department• Human Resources• Finance

STRATEGIC SUPPORT

Focus on Core Programmes Audited

Core Programmes:3. Mandatory Grants4. Funded Skills Development6. Sector Development

Support Programmes:1. Governance2. Administration5. Sector Skills Planning and Research7. Monitoring and Evaluation

Programme 3: Mandatory Grants

Performance Indicator 2012/13 Target

2012/13 Result

# of sector employers that submitted WSPs and ATRs 3,300 3,051

% increase in sector employers that submitted WSPs and ATRs 25% 18%

% of sector employers that submitted WSPs and ATRs that received mandatory grant reimbursements

100% 73% (2223/3051)

Programme 4: Funded Skills Development* Results structured into learning interventions instead of 6 sub-programmes

Performance Indicator 2012/13 Target

2012/13 Result

2012/13 Allocations

# of Learnerships entered 9,525 314 290# of Artisans entered 1,500 0 0# of Internships entered 1,850 1,026 1,792# of Bursaries entered 2,225 0 710# of AET entered 1,450 0 0# of RPL entered 2,000 0 0# of Skills Programmes entered 7,750 200 3,850TOTAL 26,300 1,540 6,642

Programme 6: Sector Development

Performance Indicator 2012/13 Target

2012/13 Result

# of training provider applications processed

340 540

# of monitoring site visits 900 35# of external moderation visits 180 510# of learners certificated 6,500 12,334# of registered constituent assessors 700 619# of registered constituent moderators 300 202# of FET college partnerships 12 3

Report of the Auditor-GeneralPredetermined

Objectives AG Material Findings Corrective Actions

Usefulness:- consistency between reported performance and planned objectives

26% objectives30% indicators inconsistent

Addendum to 2013/14 APP will enable improvement in current “gap” year. 2014/15 APP enables alignment

- measurability 53% targets not specific64% not well defined

In addition to above, technical indicator descriptions being documented as required

Reliability:- data validity, accuracy and completeness

Unable to establish PI plan being developed that documents and strengthens data management practices

Strategic Plan Period, objectives and outcomes not addressed as required

2014/15 Strategic Plan revised to strengthen compliance with National Treasury requirements

Programme 3: Mandatory GrantsAG 2012/13 findings Corrective action

WSP accepted without request for extension by employer

Not repeated in 2013/14

Mandatory grant not paid quarterly as per the grant regulation

Quarterly payments to be released once levy downloads available. SDMS modified to enable capturing and submission of WPS/ATR/PTP/PTR all year round

Mandatory grants paid to exempt companies

In terms of Circular 9 employers are encouraged not to reclaim contributions from SARS. Mandatory grant policy to be reviewed to provide for signing of a waiver

Programme 4: Funded Skills Development (1) AG 2012/13 findings Corrective action

Records management:•Outstanding information•Evidence for NSF expenditure•Certification of artisans

• New systematic filing system • Storage and access of physical records

improved• Developed checklists to ensure compliance

of supporting documentsDuplicates identified in reported artisans

Ensure SQMR and QPR are verified and approved within LI unit prior to submission to PI unit

Duplication of interns reported under current year and previous year targets

Ensure SQMR and QPR are verified and approved within LI unit prior to submission to PI unit

Programme 4: Funded Skills Development (2) AG 2012/13 findings Corrective action

The date learner entered into the Learnership does not agree to the date on the Learnership agreement

Improved contract management business processes to be implemented

Programme 6: Sector DevelopmentAG 2012/13 findings Corrective action

Training provider application forms not dated

Accreditation online system includes date of application

Statement of achievements for learners who existed on skills programmes are not dated

Oracle system has been updated to include the date of issue of the statement of results for skills programmes

Training provider applications not complete

Sub-contracting with training provider will become a pre-condition of the main contract with employer

Records management: Information not provided.

Record management systems and monthly reporting improvements implemented

QUALITY MANAGEMENT DEPARTMENT

Challenges with certification

Challenge:Challenge of certificates not awarded during the period of administration and when quality assurance was outsourced to training provider during 2009-2011 period. Backlog of certificates from previous financial years – analysed

Certification backlog project – Additional dedicated resource appointed to audit and investigate current challenge whilst division carries on with achieving current targets of funded, unfunded and self-funded learning interventions 11/2; 12/13 and 13/14.

Awaiting Remediation

Awaiting External

Moderation

EM Reports Outstanding

TOTAL Certificates Outstanding

1089 3484 5024 9597

Impact of corrective action

Certificates issuedMay 2013 – February 2014

11,327

HUMAN RESOURCES

OVERVIEW• In the financial year ended 2012/2013, the Human Resource

Department concluded the following key initiatives: – Development of the Human Resources Framework – Development of the Human Resources Policies and Procedures – Reviewed the organisational structure – Completed the Skills Audit for 2012 – Placed dedicated effort to reduce the organisation’s vacancy rate – Designed and approved the organisations performance

management system – Whilst these are key achievements as Human Resources of the

organisation, there is still much room for improvement.

EMPLOYMENT AND VACANCIES 2011/2012 NO.

OF EMPLOYEES

2012/2013 APPROVED

POSTS

2012/2013 NO. OF EMPLOYEES

2012/2013 VACANCIES

% OF VACANCIES

216 259 213 46 18

Occupational Category Number of Posts Headcount Vacancy

Rate Semi- Skilled (BL –BU) 98 88 10% Skilled (CL-CU) 108 87 19% Middle Management (DL) 36 24 33% Senior Management (DU) 11 10 9% Top Management (E) 6 4 33%

TOTAL 259 213 18%

REASONS FOR STAFF LEAVING

REASON NUMBER Resignation 10 Discharged 5 End of contract 3 Retrenched 3 Absconded 1 Pension 1 Deceased 1 TOTAL 24

FINANCE

Audit outcomes and action plans to address audit findings

SSETA was qualified on commitments: Commitment schedule included expired contracts Amounts in schedule did not agree to contracts Schedule did not include all commitments (completeness)

Root cause :System errorsLegacy commitments that were never disbursed

Action plan :– Formed a task team to clean up the contract schedule/register which comprises of

finance, legal, PMO and QMD– Regular monitoring of contracts and project nearing completion– In process of acquiring an upgrade to the commitments module (Navision)– Contacted partners with legacy balances to come forward

Other matters raised by the AG and action plans

Audit Finding Root cause Action plan

Non-compliance with laws an regulations

Financial statement not submitted by 31 May

Lack of processes to prepare financial statements regularly (monthly).

Financial statement are prepared on a monthly basis. Interim financial statements will prepared to ensure that all weaknesses are addressed before the year end

Material adjustments made to financial statements after audit

Unidentified irregular expenditure

No processes to identify, prevent and detect irregular expenditure

Ongoing monitoring of irregular expenditure. Educating other units/department on the implications of irregular expenditure

Audit findings Root cause Action plan

Lack of adequate supply chain processes • 3 quotes for purchases < R500 000• competitive bidding for purchases > R500,000

Non-compliance to Treasury Regulations

Supply chain management processes are now being implemented. All procurement requests now follow the process of 3 quotes or competitive bidding.

A procurement register has been established to monitor procurement requests to ensure these are executed timely to avoid deviations.

Plans going forward to address findings

• Update / implementation of a financial reporting system• Developing policies and standard operating procedures• Action plans with responsible people, target implementation dates that are followed

up regularly• Monthly reporting (financial statements, management accounts)• Recruiting appropriate personnel

END