Author Topic: Local Government Sector Education and Training Authority under administration i  (Read 953 times)

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The Local Government Sector Education and Training Authority (LG SETA) has recently been placed under administration in March 2013. The Auditor-General’s 100-page report indicated that virtually every transaction had something wrong whether trivial and substantial. The SETA had failed to submit Annual Financial Statements, a Performance Report or Annual Report, in contravention of the Public Finance Management Act.


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Local Government (LG) SETA presentation
Mr Nqaba Nqandela, Administrator and acting CEO, commented that while the Services SETA had just come out of administration, the LG SETA had just been placed under administration in March 2013. The Auditor-General’s 100-page report indicated that virtually every transaction had something wrong whether trivial and substantial. The SETA had failed to submit Annual Financial Statements, a Performance Report or Annual Report, in contravention of the Public Finance Management Act.

This was the situation that the administration team had inherited. The administration team had analysed and diagnosed the various matters. Forensic investigations took up much time, but the investigation was near to completion.

The CFO, Mr Omega Shelembe, gave an overview of financial performance. The Auditor-General was assisting. Levy income rose with the increase in employment statistics of employers but investment income dropped. 58% of income had been distributed as mandatory grants and had exceeded that disbursed in 2012/13. Discretionary grant projects were at a minimum in 2012/13. This was because many projects were not implemented as SCM processes were hampered in advertising tenders. The administration programme underspent by R9m due to a vacant position not being filled in 2012/13. Reserves of R49m had accumulated since 2009/10. An application to retain the funds was granted.

Ms Pumla Mkele, LGSETA Quality Assurance Manager, reported that seven colleges and six municipal training centres had been accredited, thus overachieving on that target but only one qualification had been approved by the Quality Council for Trades and Occupations (QCTO). The target had been 10. 110 qualifications had been evaluated. The target was 60. The overachievement was because of high demand from training providers to offer programmes. 250 providers had been evaluated when the target was 120, because of emphasis on the quality of training. 365 learners had had RPL. Most Education and Training Quality Assurance programmes had been achieved, or more than achieved, with the exception of Adult Basic Education and Training because workplace demands made it difficult for learners to attend.

Ms Refilwe Mokwena, LGSETA Human Resources Manager, gave an overview of personnel costs per programme. Only six provinces had managers/offices. There had been a moratorium on all recruitment until November 2012, after which only limited duration contractors could be appointed. Twelve high ranking staff had resigned in 2013/14, including the CEO, during "proceedings". In addition, four other staff members were subjects to ongoing disciplinary matters.

The Administrator, Mr Nqandela, gave the IT report. In 2012/13 the Auditor-General found that ICT controls to support accurate, complete and reliable information were not in place and that risk management was inadequate. He listed the deliverables of the turnaround strategy. He concluded, saying that the LGSETA has gone through a difficult period in the recent past, which saw it fail to play the role it is support of local government. Great strides have been made to restore the SETA back to a state of good governance and proper financial management. Much more remained to be done to achieve the ambitious objectives that have been set. The SETA would be transformed into a model SETA characterised by excellence

Discussion
Mr Mpontshane noted that mandatory grants to municipalities had increased by 8% over 10 months and wondered if this was justified, given the SETA's poor performance. Who approved these internal workshops, as their quality left much to be desired?

Ms Chili wanted to know the reasons for the resignations and dismissals.

Mr Makhubele wanted to know more details of the 250 learners certificated through RPL.

Ms Gina commented that rewards and recognition as part of the HR turnaround strategy was ‘troublesome’. Also, provincial LG SETA offices should be capacitated.

Mr Radebe said that if resignations left critical skills gaps, they should be filled as soon as possible and if resignations were actually due to people ‘running from disciplinary hearings’ they should be followed up. He was not pleased with the administrator’s progress and would give him a mark of 60%. When would legal action be taken to deal with the ‘bad apples’?

The Chairperson said that the worst two SETAs had deliberately been asked to present together today. He wanted the names of the service providers who received millions. They had to be on the system as they were accredited. The Auditor-General had said that the contracts had disappeared but the system should still show who they were, and who paid them.

Mr Nqandela said that mandatory and discretionary grant systems were stabilising and municipalities were currently to appoint accredited service providers. The SETA signed the contract. The first tranche, which was deliverable on signing, had been reduced from 50% to 30%.

An audit on beneficiaries as well as transactions had been conducted. Some beneficiaries said their training had helped them but others said they had not been contacted by the service providers after registration.

Between July and December 2013 road shows to provinces had been undertaken. Most committed grants were not taken up as municipalities insisted on appointing service providers who were not accredited. In order not to disadvantage workers, the SETA offered to arrange the training but the municipality usually declined this offer and asked for the allocation to be rolled over.

Mandatory grants increased simply because there was an increase in the payroll.

Some of those who resigned did appear to resign when they feared investigation was imminent. But leading a crusade against all of them might be expensive and futile.

Efforts to bring the SETA back to the Local Government sector were prioritised. Gauteng and North West shared an office, as did Mpumalanga and another province, for no good reason. There would soon be a presence in all provinces. A ‘different sort of person’ who would ‘be in the face of municipalities’ was required.

Mr Nqandela said that corrupt people did frustrate him because they used lawyers and caused delays but he had to follow due process. All current cases would be finalised by the end of March and new ones would take a further three months.

The Quality Assurance manager said that the RPL projects were related to Water Affairs, legislation and National Treasury. There was an official minimum competency level qualification for municipal finance people but actually many of such were Chartered Accountants i.e. they were competent beyond the minimum level but did not have the particular required certificate. So they submitted portfolios and their prior learning was recognised. In Water Affairs, some longstanding officials were awarded RPL certificates, if there was no need for them to undergo learnerships.

The HR manager said rewards and recognitions had to be based on analysing, benchmarking and comparing with others. Before that could be done, one needed job profiles. This had now been done and benchmarking had begun. There had been a decision not to pay bonuses in 2013.

The delegation left the meeting and the Committee considered a draft report and minutes. The minutes were approved and the draft report was approved, in principle, pending changes.
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