REPORT OF THE PORTFOLIO COMMITTEE ON HIGHER EDUCATION AND TRAINING ON THE ANNUAL REPORT 2009/10 OF MINING QUALIFICATIONS AUTHORITY AND INFORMATION SYSTEMS, ELECTRONICS AND TELECOMMUNICATIONS TECHNOLOGIES SECTOR EDUCATION AND TRAINING AUTHORITY, DATED 8 FEBRUARY 2011

The Portfolio Committee on Higher Education and Training, having considered the Annual Report 2009/10 of MQA and Isset Seta reports as follows:

1. Introduction

The Portfolio Committee on Higher Education and Training considered the Annual Report 2009/10 of MQA and Isset Seta on the 10 November 2010. The purpose of the meeting was primarily to assess the annual financial performance of the above mentioned Setas.

1.1 The Portfolio Committee on Higher Education & Training

Ms N Gina (ANC), Ms M Kubayi (ANC), Ms N Magazi (ANC), Ms F Mushwana (ANC), Mr A van der Westhuizen (DA) and Mr K Dikobo (AZAPO).

Apologies: Mr S Makhubele (ANC), Ms W Nelson (ANC), Mr S Radebe (ANC), Dr J Kloppers-Lourens (DA), Ms N Vukuza (COPE), Ms C Dudley (ACDP).

1.2 Mining Qualifications Authority officials

Mr D Msiza: Chairperson, Mr Y Omar: Acting Chief Executive Officer, Mr M Mdingi: Chief Financial Officer, Mr D Barclay: Executive Manager, Ms J Moodley: Acting Chief Operations Officer.

1.3 The Information Systems, Electronics and Telecommunications Technologies Seta officials

Mr L Chiloane: Chairperson, Mr O Mopaki: Chief Executive Officer, Mr J Sibeko: Senior Manager, Mr N Molefe: Marketing and Communications Manager.

1.4 Other guests

Mr H Hoon: Director, Department of Higher Education and Training, Ms F Kwaza: Parliamentary Media Liaison, Parliament and Ms K Redpath: Monitor PMG.

The report provides a brief summary of the presentations by both Setas which highlight the Setas mandate and mission, strategic imperatives, delivery on the NSDS II, financial highlights for the year under review and other relevant matters.

2. Summary of the presentations

2.1 MQA

Mr Y Omar: Acting CEO led the presentation which highlighted the following key issues:

• The strategic objectives of the MQA include transformation of the sector through skills development, development of quality training and development and re-skilling of employed / unemployed for sustainable employment.
• In terms of financial performance, the MQA received a total income of R572 million in the year under review accompanied by an unqualified audit opinion.
• The mining sector employs 551 195 employees with 35% of them being located in North West followed by 19% in Gauteng.
• In terms of learning programmes, 13348 employed learners completed learnerships and 1044 unemployed learners also completed learnerships.
• There were 166 learners trained in four provinces for New Venture Creation (NVC) and 151 new ventures were in operation 12 months after completion of the programme.
• There are still transformational challenges in the sector and accidents in mines remain a major challenge.

2.2 Isset Seta

Mr O Mopaki: CEO led the presentation which highlighted the following key issues:

• The Seta has provided learning and employment opportunities to 1452 unemployed learners during the year under review. The Seta has a staff complement of 32 personnel.
• Due to the nature of the ICT sector, most companies are largely situated in Gauteng with more than 80% learners located in the province.
• In terms of financial performance, the Seta received a total income of R361 million with a net surplus of R68 million. The Seta received an unqualified audit opinion with matters of emphasis on the two pending litigation cases against the Seta. The Auditor-General also raised the matter of restatement of corresponding figures as a result of errors discovered in the current financial year.

3. The following formed part of the discussion

MQA

The MQA was requested to explain the matters of emphasis raised by the Auditor-General in its financial performance and whether there were any steps taken to the culprit to be formally charged for the fraudulent activity.

It emerged that administration expenditures increased by 25% during the year under review. The Seta was requested to elaborate on the matter.

The Committee was extremely concerned with the number of accidents and loss of lives in the mines due to lack of safety precaution measures. It was noted that some mines were located close to communities and their impact on the environment had devastating effects.

It was raised with concern that restatement of corresponding figures as a result of errors reflected either lack of capacity or fraudulent activities of certain individuals in the Seta. It was noted that the audit committee should ensure that such instances do not recur as they reflect poor management from the Seta.

The Committee was extremely concerned with the delays in issuing of certificates for learners that completed learnership programmes.

Isset Seta

The Committee was concerned with the gender imbalances at senior management of the Seta.

It was noted that the targets of the Seta might have been set too low and hence it has over-achieved in most of its programmes.

The Committee requested an explanation on matters raised by the AG in the financial performance of the Seta.

It was noted with concern that as much as the Seta offered New Venture Creations (NVC), most of these young people were unable to sustain their business and the Seta did not offer necessary support to ensure sustainability and viability of the businesses.

The Seta was requested to explain the remuneration of board members.

4. Responses

MQA

• It was noted that no mines can operate without consulting nearby communities and necessary step are taken by the Department of Minerals to mines who don’t comply with the laws.
• The use of fanagalo language at mines is an extreme concern for the Seta and employees have been encouraged to stop the use of the language.
• The emphasis on matter raised by the AG was based on the fact that the MQA did not register cellphones used by employees as assets of the organisation.
• The Committee was informed that 66% executive management positions are held by black people in the sector.
• The issue of delays in certificates has since been addressed and learners receive their certificate within a month after completion.
• The reason for the appointment of the acting CEO is that the contract of the previous CEO expired.

Isett Seta

• The Committee was informed that Isett Seta board members are paid R2000 per meeting.
• Isett Seta allocates funding to employers not service providers for facilitation of learnership programmes.
• The gender imbalance in the Information and Communication Technology (ICT) sector is a concern and Isett Seta will offer bursaries to assist students with their undergraduate and postgraduate studies in the ICT fields.
• Financial administration in terms of skills capacity was a concern for Isett Seta and hence a new team has been appointed to address this challenge.
• Isset Seta admitted to the Committee that it was not doing well in terms of offering more support to NVCs and tracking them was also a challenge. It promised to partner with the National Youth Development Agency (NYDA) for sustainability purpose of the NVCs.
• The suspended CFO of Isett Seta was suspended with full pay during the investigation period of his allegations to mismanagement of funds.
• Isett Seta will expand to other provinces with the view to access more learners from disadvantaged remote areas.

4. Conclusion

The Committee was extremely concerned with the financial management capacity of both Setas since the Auditor-General pointed emphasis on matter in their annual financial performance. It was unanimously agreed to by the Committee that the National Skills Development Strategy III targets were set very low hence some of the Setas achieved more than three times their targets. It was noted that the Committee should make inputs to the forthcoming NSDS III before it can be made official with the objective of assessing Seta targets and other critical areas.

It was clear from the proceedings that Recognition of Prior Learning (RPL) remained a challenge when it comes to implementation by Setas. The issue of transformation in executive management level positions in the mining and ICT sector is still a major challenge that remains unsolved. Access to both Setas by people in rural areas is still a challenge as they don’t have regional offices in rural provinces. The Committee promised to engage both Setas during the next financial year when dealing with strategic plans.