PRESENTATION TO PARLIAMENTARY PORTFOLIO COMMITTEE ON HIGHER EDUCATION AND TRAINING 9 OCTOBER 2018

CONTENTS Introduction MICT SETA Sector Profile Past Performance Status of the SETA Financial Information Audit Outcomes Corrective Measures

INTRODUCTION

MICT SETA TEAM Sihle Ngubane - Chairperson of the Board Thabo Mofokeng - EXCO and Board Member Charlton Philiso - Acting Chief Executive Officer Noni Gontshi - Chief Financial Officer Sekgana Makhoba - Senior Manager: Sector Skills Planning Xabiso Matshikiza - Manager: Marketing and Communications

MICT SETA SECTOR PROFILE Tele-communications 11% Information Technology 53% Advertising 12% Electronics 13% Film & Electronic Media 11% Currently 26 995 employers in the sector A 12.9% increase from the previous year

Learning Intervention PAST PERFORMANCE Learning Intervention Actual Achievement 2013/14 2014/15 2015/16 2016/17 2017/18 Total Learnerships 2 500 3 824 3 539  4 052 1 056  14 971 Bursaries 469 320 1067 599 175  2 630 Internships 885 1 086 565 1 500 1 673  5 709 Skills Programmes 663 1 100 1 750 2 525 1 182  7 220

STATUS OF THE SETA

SETA PROBE UPDATE Forensic Report: Completed Special Investigating Unit (SIU): Ongoing Public Protector: Ongoing

FINANCIAL INFORMATION

FINANCIAL PERFORMANCE

FINANCIAL PERFORMANCE

FINANCIAL PERFORMANCE Per financial year Audited R'000 2017/18 2016/17 2015/16 2014/15 Skills development levy income 817 844 742 891 702 301 659 912 Income growth % 10.09% 5.78% 6.42% 8.77% Discretionary grant expenditure 611 339 721 228 502 062 478 587 Mandatory grant expenditure 154 245 144 520 140 927 130 382 Mandatory grant pay-out % 76% 80% 81% 78% Administration expenditure 79 397 74 456 68 326 61 572 Surplus/(deficit) 11 334 (149 966) 31 601 19 819

FINANCIAL PERFORMANCE Per financial year Audited R'000 2017/18 2016/17 2015/16 2014/15 Cash and cash equivalents (A) 361 230 334 687 418 234 439 105 Receivables (B) 4 688 19 413 59 639 51 868 Payables ( C ) 109 507 109 149 83 212 130 076 Commitments ( D ) 302 962 344 034 394 067 365 982 Cash deficit declared to NT (A+B-C-D) (46 551) (99 083) 594 (5 085) Total reserves 261 055 249 619 399 586 366 932 Discretionary reserves 256 166 244 868 394 267 361 102 % of commitments vs. discretionary reserves 118% 140% 100% 101%

FINANCIAL PERFORMANCE Overall the financial viability assessment of MICT SETA is favourable based on the following: The creditors collection period is sitting at 13.1 days compared to credit terms of 30 days. The entity have a surplus in the current year compared to significant loss in the prior financial year, with positive cash flows from operating activities, accompanied with a significant increase in the cash and cash equivalents balance compared to the prior financial period. The net asset liability position of the MICT SETA is positive. The SETA’s financial viability is relatively good, as indicated by the assessment above.

AUDIT OUTCOMES

AUDIT REPORT HISTORY 2017/18 unqualified audit report with findings. 13 years Unqualified Audit Reports, of which: - 7 years of Unqualified Audit Report (2002, 2003, 2007 – 2011). - 6 years of PFMA Unqualified Audit with no findings (Clean Audit) (2012 – 2017). The MICT SETA has received the PFMA Clean Audit Award and Certificate of Excellence for the 6 financial years (2011/12 – 2016/17) from the Auditor General.

LATEST AUDIT OUTCOME Overall outcome – unqualified audit opinion: Material adjustments in the disclosure of commitments balance Emphasis of Matter: - Irregular expenditure - Related party disclosure

CORRECTIVE MEASURES

GOVERNANCE New Board Appointment Governance Sub-Committee New Audit and Risk Committee Review of the Delegation of Authority

BOARD INTERVENTIONS Vacant Executive Positions: - Board Secretary position filled - Senior Manager: Corporate Services Role of Board in regards to the allocation of Discretionary Grants Concluding outstanding case of previous CEO Board engagement with Special Investigating Unit (SIU)

CORRECTIVE MEASURES New Discretionary Grants Policy Ongoing approval of applications by the EXCO and Board Full automation of Service Level Agreements (SLA) process Alignment of SLA dates Review of the Delegation of Authority All tenders are subjected to Internal Audit review Consequence management Improved contract management processes

Q & A

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