Author Topic: CATHSETA - Placed under administration 12 February 2015  (Read 935 times)

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CATHSETA - Placed under administration 12 February 2015
« on: October 20, 2015, 11:20:20 AM »
CATHSETA - Placed under administration 12 February 2015


Presentations were given by the Administrators of two Sector Education and Training Authorities - Safety and Security Sector Education and Training Authority (SASSETA) and Culture, Arts, Tourism, Hospitality and Sport Education and Training Authority (CATHSSETA) on their strategic and annual performance plans (APP) and budget for 2015.

The APP and strategic plan for SASSETA had been created before the Administrator assumed duties. The plan was structured along programmes, which were described, with their main focus and strategic objectives outlined. SASSETA had been placed under administration due to the performance of SASSETA, irregularities identified, and non-compliance with the Skills Development Act and other legislation. The planning process had shown a number of problems, and the APPs submitted were not necessarily compliant with National Treasury requirements. The Skills Plan that was submitted was now being reviewed, and this indicated the need for an extensive overhaul of the APP, since there was quite a lot in the Skills Plan that did not actually speak directly to the security sector. There were problems regarding general governance, and the way in which decisions were made would be investigated and identified. Often, it seemed that decisions were made informally and not formalised so that, for instance, money was being paid under contracts not properly signed. The Administrator highlighted in detail her discoveries so far and some of the steps put in place  to address them.

The Department of Higher Education and Training (DHET) also highlighted some of the reasons for placing SASSETA under administration. To SASSETA's credit, there were investigations done and some officials were dismissed, but the problems recurred the following year, highlighted in a qualified audit with repeat findings. The Minister had asked the Board to present a turnaround strategy, and to explain issues of  irregularity around the employer grant and project expenditure, the issue of procurement and contract management, the financial performance and the weak functioning  of the audit committee as well as lack of poor controls within SASSETA and fraud around the discretionary grant. When the Board failed to come up with a turnaround strategy, the Minister was left with no other option but to place SASSETA under administration, which was done in February 2015.

Members were concerned about the level of readiness and preparedness of SASSETA, and stressed that where there were problems; the Auditor-General and National Treasury could have assisted. They felt that it would be a time-wasting exercise to try to go into all the details of the APP, and noted a continuing lack of measurable targets. They asked about the forensic investigation and questioned the existence of discretionary grants, which appeared to present opportunities for fraud and non-compliance. They asked about the consequences to follow, and whether anyone would be charged. They asked why the CEO was still in place and her position was explained; she had been unfairly dismissed and was not in the organisation between January and November 2014. The basis of the discretionary fund was explained. The DHET also explained its role and relationship with the Administrator in terms of the Skills Development Act.

The CATHSSETA similarly gave an overview of the Strategic Plan and 2015/16 APP. It was noted that the in-fighting within the Board affected the performance of the organisation, so that targets were not met. It had also received qualified audit certificates and the Minister instructed that it be put under administration in October 2014. The achievements in the last five months, under administration, were highlighted. The Administrator had conducted an organisational diagnosis and analysis, and outstanding disciplinary cases and contracts were reviewed, with some contracts cancelled. Disciplinary action was instituted against the CEO and CFO, which led to their suspension. The Strategic and APPs were developed, and interim structures of governance instituted for Remco and working groups. The numbers of programmes were drastically reduced, to improve focus and he took the Committee through the revised programmes, sub-programmes, targets and purpose. The main challenges were that many of the service providers were urban-based, despite the rural nature of the sector. Levy income was minimal, and many of the small service providers were exempt from paying skills levies. The CATHSSETA was widely divergent in scope, yet had no provincial footprint. Contracts had been poorly managed and there was an inability to match service delivery needs and financial challenges.

Members asked for a summary of the main problems, and the position of the Board, and anyone else who had foreseen the downward trends, and asked if consequences would follow. The allegations of corruption indicated that supply chain management policies were not implemented, and this led to criminal activities, and again, they asked about the consequences. They were particularly concerned that the children of Board members had been awarded bursaries and asked if there was irregularity in this. They asked about the skills most needed and how CATHSSETA would be implementing its desire to spread to other provinces, and how those were chosen. Members also were given examples of irregularity, and were assured that the investigations were extending to all in the organisation, but the immediate challenge was to find supporting evidence. The role of the future CEO and relationship and ability to approach the DHET was being looked into. The Department confirmed that it was working on legislative changes to address some of the problems apparent.

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