Local Government, Public Service, Safety & Security SETA Annual Reports 2011/12

Meeting report

Safety and Security Sector Education and Training Authority (SASSETA) presentation
Mr Abbey Witbooi, Chairperson, Safety and Security Sector Education and Training Authority (SASSETA) introduced the delegation.

Ms Ntombekaya Qamata, Acting CEO, said that 37 questions posed during SASSETA's last visit to the Committee had been consolidated into the presentation. Safety and Security comprised a legal chamber. There were 11 016 registered legal firms and 8 828 security service providers. She presented the number of SAPS stations. There were 241 Correctional Services service centres, of which two were private prisons. There were 381 magistrates courts and 142 provincial offices.

Ms Qamata said that SASSETA had been targeting the identified skills in all sectors.

Ms Qamata said that the Auditor-General (AG) had made four major findings. This was the first time in eleven years that SASSETA had received a qualified audit report. The first finding was that there were no controls in place over the planning, implementation and reporting of performance information. An action plan had been put in place and progress was being made.

Ms Qamata said that the second finding was that mandatory and discretionary grant reconciliation had not been performed. Monthly reconciliation was now being conducted, and quarterly reports were being presented to the Board.

Ms Qamata said that the third finding was that there were no proper controls in place to ensure that information used in the reporting of performance was valid. The filing system was being overhauled and a Standard Operating Procedure (SOP) had been developed and implemented.

Ms Qamata said that the final AG finding was that there were weaknesses in supply chain management (SCM) which had resulted in irregular expenditure. The supplier database had been broadened. The structure of SCM had been reviewed, and checklists and SOPs had been developed.

Discussion
The Chairperson said that the tender process was clear. Anything amounting to more than R500 000 had to be put out to tender, while there had to be three quotes for lesser amounts before funds were committed. He wanted to know who was responsible for SCM. The AG had found that the law had not been followed.

Ms Luvuyo Mboniswa, SASSETA CFO, said that there had been occasions when three quotations had not been sought. Advertisements were placed in newspapers such as the Sunday Times and City Press, but the distribution was not wide due to two media houses owning all the newspapers. The CEO had the power to approve contracts.

The Chairperson said that quotations did not come from the media, but from service providers. There should be a procurement officer, failing which another official should be played in charge.

Ms Mboniswa said that all advertising was handled by the head office. A group like Media 24 would give a single quote for advertising in all its publications. The Board had delegated the CEO to approve these deviations from normal procedures. In the absence of an explicit delegated authority from the Board, SASSETA had been found wanting.

The Chairperson said that no one had the authority to dispense with the need for quotations. If a disaster were to happen, the requirement for a tender could be dispensed with, but there would still need to be a quotation process.

Mr Witbooi said that there was an attempt to move away from the quotation process. The Board was wary of deliberate negligence by the management. The Board was trying to put correct procedures in place. There was a serious capacity challenge in SCM. If three quotations could not be procured, it opened the organisation up to corruption. There were two investigations regarding SCM practices.

The Chairperson said that any person who bid for a tender or supplied a quotation should be vetted by the South African Revenue Service. It was a simple procedure and could be achieved with a single telephone call. All transactions needed to be disclosed where there had not been quotations, the amount involved and the identity of the companies involved. This information must be sent to the Committee within two weeks, and the Committee would decide whether further action was needed.

The Chairperson asked about bursaries for students at universities or other tertiary institutions. He wanted to know if performance was aligned to government expectations. The Committee was legally bound to take action where there was evidence of wrongdoing. Where there was suspicion, Parliamentary legal services should press criminal charges.

Ms Qamata said there was a target of 2 176 learnerships. The achievement was 494. One of the reasons was the late advertisement of these opportunities. Alignment to government cycles had delayed the process. The situation had since improved.

The Chairperson asked about placement of students and bursaries. There were fifty Further Education and Training Colleges (FETs), and he asked why advertising was necessary as the information could be disseminated there.

Mr Solly Ngoasheng, Senior Manager: Service Delivery and Administration, SASSETA, replied that the late advertisement had affected the number of bursaries issued.

Mr L Bosman (DA) wanted to see if the system was working properly. The figures before Members showed that it was not.

The Chairperson wanted a breakdown of which projects had been advertised. The Department of Higher Education and Training (DHET) would provide funding where it was appropriate.

Mr Bosman was also worried that there were no substantial agreements with FETs. He would have taken it for granted that the negotiations described by SASSETA should have been in place some time ago.

Mr G Radebe (ANC) had made contact with higher education institutes (HEIs) in his area of Mpumalanga. None of them reported any contact with SESSETA.

The Chairperson said that if the Board condoned something illegal then they were in trouble. He asked this in the context of expenditure of R16 million quoted in the Annual Report.

Mr Witbooi said that the purchase had been stopped at the second Board meeting. Something terrible had gone wrong. A contract was issued to a service provider for a joint venture even though this provider was not accredited. This was to the value of R700 000. The work itself was sub-contracted to an accredited service provider for R100 000, while the main contractor pocketed the rest. Regarding the issue raised by the Chairperson, some strides had been made. Management was slow to realise what was going on. There had been some achievements in terms of learnerships. The Department of Defence had agreed to take on 600 artisans, for example. There was a disjuncture between the activities of the SASSETA and of universities. Opportunities were advertised as late as October. Regarding placement, he admitted that little had been done. There was a problem between SASSETA and DHET. The Department must tell SASSETA how many people it could absorb. There were some co-funding agreements, such as in pilot training.

Ms Qamata said that some contracts had only been concluded since the end of the financial year (FY). The agreements had been reached with a number of FETs. An office had been opened on the eThekwini FET campus.

The Chairperson said that the Committee wanted to see the forensic reports on current investigations.

Mr Radebe asked what plans were in place to avoid further occurrences of the problems raised by Members.

The Chairperson said that criminal activity could not be condoned. Whenever a report was received from an entity indicating criminal acts, Parliament itself could lay charges. It was not necessary to go through the DHET. Perhaps a similar special court should be set up for corrupt civil servants as had been the case during the soccer World Cup.

Public Service Sector Education Authority (PSETA) presentation
Ms Koko Mashigo, PSETA Chairperson, introduced the delegation. Highlights of the FY were the securing of funds from the National Skills Fund (NSF). An evidence based sector skills plan (SSP) and sector career guide had been updated. Skills development facilitators had been capacitated. There had been engagement with FETs and HEIs, with two learnerships being registered. A Trades and Artisan unit had been established. Other capacity building and accreditation programmes had been launched. Key strategic priorities had been developed.

Ms Mashigo showed Members how PSETA projects were distributed around the country.

Ms Mashigo quoted from the AG report. In the 2010/11, the AG had issued a disclaimer of opinion based on NSF funds received during the 2004/05. The project had been plagued by fraudulent activities, lack of record keeping and gross negligence. An amount of R30 million of the total transfer of R97 million could not be accounted for. During 2011/12, source documents had been studied around the country. This had resulted in the unaccounted liability being reduced to R6.1 million and the AG was satisfied with the progress being made. The AG had provided a qualified report for the 2011/12 rather than a disclaimer. The report had also indicated an area of improvement relating to procurement, financial and other management issues.

Ms Mashigo said that the Special Investigating Unit (SIU) had conducted an investigation. The SIU would look into outstanding documentation. Allegations of fraud would be investigated. PSETA had received a letter of support from the Minister.

Ms Shamira Huluman, CEO, PSETA, said that the NSF problem stemmed from 2005. The documents had been signed by the Acting CEO at the time, and the size of the amount in question had been reduced considerably from R30 million to R6.1 million. Supporting document had been sourced in the archives.

Ms Huluman said that PSETA did face some other challenges. It received no revenue from levy payments from government departments. A Presidential proclamation had been issued on the SIU investigation. A lease agreement had been entered into in 2010 by the previous Board without proper SCM procedures being followed. This had resulted in irregular expenditure of R5 million per annum. PSETA was currently discussing the issue with the landlord, as the building was too big for PSETA. The lease was expensive, and the building was not disabled friendly.

Discussion
The Chairperson said that projects quoted in the AR should be strategic ones. Some operational projects were not detailed. Many SETAs were not providing useful information in order to evaluate performance. The state must ensure that all Departments were providing the 1% of wage bill levy. This would amount to billions of Rands. Most people wanted training. This funding was needed to satisfy training needs. PSETA had a major role in placement of learners within the public service. In the National Assembly the previous day, the Chairperson of the Standing Committee on Public Accounts (SCOPA) had reported to Parliament. There was a disclaimer. Whenever there was a qualified report, it was inappropriate to talk about progress. Progress was only relevant once all problems had been solved.

Mr S Mayathula (ANC) pointed out some inconsistencies in the Annual Report (AR). What worried him is that guidelines were not being followed.

The Chairperson said that even a layperson knew what the law was. A CFO could not sign off a document involving money without realising the consequences. Management had to understand what the law prescribed and act accordingly. Senior management could not blindly accept that the actions of their juniors were correct. If the SETAs were not conducting themselves correctly, it was a poor reflection on the oversight role played by the Minister and Parliament.

Local Government Sector Education and Training Authority (LGSETA) presentation
Mr Duma Nkosi, Chairperson of the Board, Local Government SETA, said that there were still issues to be addressed with the Minister. He asked the Committee's permission to withdraw their report. There were some interesting challenges. He did not want to report on a piecemeal basis.

Mr Radebe said that a response was needed on certain issues.

The Chairperson asked when the report would be finalised. The Committee needed to finalise the Budget Review and Recommendation Report (BRRR) process. Engagement with SETAs was being shortened in interests of time.

Mr Nqaba Nqandela, Chief of Staff, DHET, said that the report should be finalised within two weeks.

Mr Radebe felt that two weeks was too long, and suggested instead one week.

The Chairperson said that the financial statements were required. The SETA could not dispute the findings of the AG. A thorough investigation would have to be conducted if this was the case. The Committee would still be meeting with other SETAs the following week. Most SETAs had not given useful information. He suggested that DHET facilitate a workshop on the subject.

Mr Gwebinkundla Qonde, Director-General, DHET, said that the Department was working on the matters raised. There had been contact with the AG on the suggestion of the workshop. There was engagement with the SETAs that were seriously under-performing or had been identified as dysfunctional by the AG. In cases where procedures had been ignored, or malpractices had occurred, the Department wanted to see all those implicated held to account. There must be consequences. There would be decisive intervention based on the evidence at hand. Citizens could not be expected to bear the burden of dysfunctional entities. The DHET was the custodian on behalf of the public. DHET wanted to see the will to overcome the challenges by the entities. The attitude to work ethic must change. The element of entitlement was destructive given the services that needed to be rendered. Issues would not be addressed adequately until ethics in the work place were addressed radically.

The Chairperson said that those shown to be guilty of transgressions of the Public Finance Management Act, had to be named. There were problems with Board members resigning or failing to attend meetings. The Chairs were consistent in their attendance.

The meeting was adjourned.