Department of Higher Education and Training Briefing by the National Skills Authority on its overall performance report of the Sector Education and Training Authorities Portfolio Committee on Higher Education and Training 18 November 2015

Contents Chairperson’s Foreword Development of Business Case Third Term NSA Key Areas of Focus and Advice Fourth Term NSA Strategic Focus Areas Background Summary of Functions Functional NSA Structure Progress to date NSA work on SETA Landscape - NSDS Review Process NSA Budget NSA Projects funded by the National Skills Fund NSA Budget Estimates Part 2: NSDS III Implementation Progress Part 3: SETA Performance Review Conclusion 2

National Skills Authority (NSA) is established in terms of Chapter 2, section (5) of the Skills Development Act (SDA) 97 of 1998, as amended (Act 37 of 2008) to advise the Minister as per the Act SDA provisions require the NSA to execute an oversight and advisory role over the NSDS policy, implementation, etc. White Paper for Post-School Education and Training states that “the National Skills Authority will concentrate specifically on monitoring and evaluating the SETAs. This implies that it will become an expert body with high-level monitoring and evaluation skills.” NSA has begun a process of developing a business case on the monitoring and evaluation to ensure full execution of this new role Chairperson’s Foreword 3

Monitoring and evaluation is imperative to the ability to measure impact in order to successfully manage outcomes and this is deeply reliant on the integration of the varied sources of data in order to ensure that “the data may be analysed in a meaningful way”. By collecting Skills Development information from all delivery agents, the NSA will be better able to monitor and evaluate the qualitative performance indicators linked to the goals of the NSDS, namely that Skills Development: achieves the NSDS III aims and transformational imperatives is based on the NSDS III pillars supports the NDP objectives, HRDSSA goals and other overarching government programmes and priorities Chairperson’s Foreword 4

The Government Technical Advisory Centre (GTAC) is appointed to assist the NSA to align its new function with the current M & E model and framework of government. Scope of the services required from GTAC will include the following: Conducting of a proper diagnostic analysis to confirm the need for a repositioned NSA whose role goes beyond focusing on M&E for the SETAs, but also includes M&E for the whole skills sector; information and knowledge management; policy dialogue facilitation and macro-level planning; The determination of the capabilities that will be required by the NSA in order to deliver on these priorities, including the development of a coherent skills delivery model; Development of Business Case 5

The completion of a costed business case that includes a comprehensive risk assessment and a cost benefit analysis; The business case is to be accompanied by an implementation plan, including the development of an M&E plan to be used for the management of the implementation process. Development of Business Case 6

To recap on the 3 rd NSA strategic areas on which the Minister was advised over the transition period. These in the main were achieved however, they remain the bedrock on which the 4 th term focus areas have been built. These were: Review the skills development legislative framework to support integration of Education and Training and national government (inclusive of the NSF framework) Coordinate consultation process on the review of the Skills System, NSDS III and the SETA landscape with stakeholders and the PSDFs in order to provide advice to the Minister by Develop and implement M & E framework in terms of the White Paper for Post-School Education and Training including the development of the business case. Third Term NSA’s Key Areas of Focus and Advice 7

Mobilisation of business, government, community and labour to take full ownership of the NSDS III and the development of the related framework (including mobilisation of the SADC Region in SD and TVET). Strengthen M & E functions, particularly in respect of the performance and governance of the NSDS III. Coordinate and promote research, development and innovations so that business enterprise opportunities are created to benefit communities and the vulnerable in particular. Third Term NSA’s Key Areas of Focus and Advice 8

Despite the late appointment of the 4 th term NSA by 9 months, this Authority has already made strides including determining the strategic focus areas on which to advise the Minister and to enhance the SD environment. Align the role of the NSA with SDA and WP-PSET mandate Strengthen the capacity of the NSA and Secretariat (development of business case) Provide advice on the National Skills Development policies to the Minister and make inputs/participate in other DHET related policy development processes (NSDS, SETA landscape, etc.) Review Skills development legislative framework to support integration of education and training and the national priorities of government (inclusive of the NSF framework) Fourth Term NSA’s Strategic Focus Areas 9

Develop capacity of skills development stakeholders and system (establish Turin-like centre) Commission and initiate research, development and innovation to promote beneficiation and business enterprise development opportunities Monitor and evaluate the work of the SETAs and the implementation of the NSDS III Promote skills development and profile the work of the NSA through communication and marketing Support post-school education and training to realise national priorities. Forth Term NSA’s Strategic Focus Areas 10

The 3 rd term of the NSA ended on 30 June 2014 and due to delays, the 4th term of the NSA commenced in March 2015 and had their inaugural meeting on April 2015 Given the anticipated backlog, the NSA was workshopped on the previous 3 rd term NSA work, inducted on the role and mandate as well as updated on the pressing issues requiring advice. These included: Review of the NSA strategic focus areas, Update on the service level agreements of the SETAs as well as their performance Sector skills plans (general undertakings – Minister and Chairpersons’ meetings) Update on the work of HRDC Development of the NSDS IV and SETA landscape process Governance and performance of the SETAs including appointments of chairpersons SETA Grant Regulations Labour Court judgement Background 11

Summary of Functions 12 NSA Functions AdviceLiaison (SETAs)ConsultationOther Advise the Minister on: National Skills Development Policy  National Skills Development Strategy (NSDS)  NSDS Implementation Guidelines  NSF Funding Allocation Strategic Framework and Criteria  SDA Regulations (excluding QCTO regulations) Liaise with SETAs on: The National Skills Development Policy  The National Skills Development Strategy  Sector Skills Plans Consult with the Minister on: SETA Changes, Amalgamations, Dissolutions and Administration  SETA SLA Regulations and Contents  SETA Plans and DG Reporting requirements  SETA Grants  SETA Powers  Employee / Union Skills Development Rights  NSF Administration and Operations  Provincial Skills Development Forums  SDA Performance  Skills Development Levies Act Regulations The Authority must:  Perform its functions in accordance with this Act and its constitution  Conduct investigations on any matter arising out of the application of this Act  Exercise any other powers and perform any other duties conferred or imposed on the Authority by this Act  Receive, from the Department, information on skills  Perform any function of the National Training Board functions The Authority has: The prescribed powers of entry and to question and inspect Liaison (QCTO) Liaise with the QCTO on: occupational standards and qualifications  the suitability and adequacy of occupational standards and qualifications  the quality of learning in and for the workplace The NSA EO must be a QCTO board member Reporting Report to the Minister on the: NSDS implementation progress Comment The Authority must: Comment on the NSF annual financial statements

Functional NSA Structure 13

Fourth term strategic focus areas approved and the work plans of the committees aligned to these Terms of reference for the committees revised to achieve the SDA mandate whilst transiting into the new role of M&E NSA Constitution and Code of Conduct were adopted whilst the relevant committee undertakes their review Work Integrated Learning workshop convened to solicit input into the Work Place Based Learning Policy framework and to encourage uptake of graduates into workplaces. This was also complemented by the research colloquium. Advice was provided on: The appointment of SETA Chairpersons; and The SETA Grant Regulations Court judgement Progress to Date 14

The extension of the NSDS III with additional priorities until 2018 The re-establishment of the current SETA landscape until 2018 to allow for the review The release of the proposal document on the NSDS and SETA landscape beyond 2018 for consultation The Authority convened workshops and meetings over and above its own focused sessions to address strategic matters and some of these were: Meetings with the Minister on the SETA Grant Regulations, SETA landscape and NSDS proposal, and other priorities in skills development Progress to Date 15

Addressing the Public Service Trainers Forum (HRD managers of all provinces and national government departments) on the need to open workplaces for the WIL and to fast track implementation of NSDS III. Consultation on the envisaged NSDS and SETA landscape was made Meeting with the SETA Chairpersons and the CEOs to address M&E matters related to NSDS III implementation, governance and also to initiate the consultation process Working session with the SETA M&E managers to ensure common understanding in reporting against the NSDS III Meeting with the Provincial Skills Development Forums (PSDFs) from all provincial on M&E of the NSDS III and consultation on the NSDS and SETA landscape proposal Progress to Date 16

The scope of the work required to undertake the review processes include: Analysing key legislative prescripts impacting on the NSDS and SETA landscape to ensure that the review responds to the needs of an integrated post-school education and training system i.e.  White Paper for Post-School Education and Training;  Ministerial Task Team (MTT) report on the performance of SETAs;  The Skills Development System Review report; and  The National Development Plan (NDP) and Industrial Policy Action Plan (IPAP). NSA’s work on SETA Landscape-NSDS Review Process 17

Developing criteria for the review of the SETA landscape and the NSDS Consulting NSA Constituencies, PSDFs, and other interested stakeholders on the NSDS. Consolidating public comments on the NSDS and SETA landscape review Providing advice to the Minister 18 NSA’s work on SETA Landscape-NSDS Review Process

NSA receives a budget allocation from the DHET through voted funds and in the main these funds are for administration activities such as: – Personnel expenses for Secretariat staff – Administration and logistics (i.e. printing, travelling, venues, subsistence) The NSA Secretariat Directorate that is housed in the Skills Development branch of the DHET is responsible for the allocation Recently the NSA project and activities are funded from the special NSF allocation for the NSA priorities (repositioning of the NSA through the M&E business case; impact study on the NSDS III, development of the WPBL framework, capacity building of Constituencies and SD system, etc.) NSA Budget 19

Emanating from the NSA key strategic objectives the NSA identified a number of projects to implement in order to achieve the strategic objectives. The details of the projects are as follows: Constituency Capacity building project: the project is aimed at building the capacity of the NSA constituencies on the post- school education and training system and the National Skills Development Strategy (NSDS III) objectives. Skills marketing and communication: the project is aimed at promoting and advocating the NSDS and the work of the National Skills Authority. Provincial Skills Development Forums: the project is aimed at driving the implementation of the skills development agenda in Provinces. NSA Projects Funded by the National Skills Fund 20

Skills research and legislative review: the project is aimed at improving the effectiveness, efficiency and relevance in the skills development and training system. Strengthening the institutional capacity of the NSA (Secretariat): the project is aimed at building and strengthening the capacity of the NSA and Secretariat to effectively execute its legislated mandate. Monitoring and evaluation: the project is aimed at aligning the mandate of the NSA as per the Skills Development Act and the White Paper for post-school education and training. Stakeholder mobilisation/National-Public Dialogue & Advocacy: the project is aimed at creating awareness and mobilising business, government, community and labour to take full ownership of the NSDS III and the development of the related framework. NSA Projects Funded by the National Skills Fund 21

NSA Budget Estimates 22 Item Description/Activity 2009/102010/112011/122012/132013/142014/15 1. Compensation of Employees R2,244,180R2,368,390R2,473,800R2,627,510 R2,758,221 R4,372, Goods and ServicesR1,241,820R1,311,900R1,359,000R1,494,000R1,772,00R1,418, Machinery and Equipment ALLOCATION FROM NSF R’000, Skills Conference, events & Awards Marketing, communication & PSDFs NSA Research and consultancy services NSA &Constituency capacity building

NSA Projects Budgeted from NSF Allocation 23 Name of projectProject Background & DescriptionReference sourceActivitiesBudget estimate 1. National Skills Development (NSDS) Review The National Skills Development Strategy (NSDS) and the SETA landscape are as per the Skills Development Act effective for a period of five years. A review is undertaken after every five years. The current SETA landscape is due to expire in March Skills Development Act 1998 as amended Develop SSR Review business case R Conduct public hearing processes Develop report for NSDS Review NSDS Annual implementation report 2. SETA Landscape reviewConduct public hearing processes Develop report for SETA landscape review 3. ResearchResearch should be commissioned to inform decision making with regard to improving the effectiveness, efficiency and relevance in the skills development and training system. NSA Research agenda Develop research proposals Commission research Manage and report on research projects 4. Monitoring & EvaluationThe NSA has been mandated to focus on monitoring and evaluation of SETAs. Effective execution of the M&E function should be supported by an effective monitoring and evaluation framework. White paper for post-school education and training NSA inauguration Develop M&E business case Develop M&E framework 5. Sector Skills Plan (SSPs)panelThe development of SSPs is one of the key functions of SETAs. The project is aimed at improving the quality of the SSPs. SDAProvide technical support to manage and report on the SSP panel 6. Capacity buildingThe NSA will require ongoing capacity building to effectively execute its functions. NSA capacity building programme Facilitate NSA board training and logistics for training R Stakeholder mobilisationStakeholder mobilisation and engagements are key in the work of the NSA. The NSA convenes a number of stakeholders engagements including all Provinces and skills development and training experts and implementers. SDA Manage logistics for NSA events R SD-TVET workshop (SADC) Skills Conference Develop reports for workshops 8. Provincial Skills Development ForumsThe PSDFs are established in Provinces to ensure the implementation of the NSDS and key strategies in Provinces. SDAManage logistics for PSDF events R Conduct provincial public hearings Develop report for provincial public hearings Manage and report on provincial projects 9. Communication, marketing and advocacy To revise and align the marketing and communications strategy of the NSA to the new function NSA marketing and communication strategy Review the NSA marketing and communication strategy R Communication, marketing and advocacy of NSA events and projects Develop NSA logo &website

Part 2: NSDS III Implementation Progress NSDS GOALS Goal 4.1: Establishing a credible institutional mechanism for skills planning Goal 4.2: Increasing access to occupationally‐directed programmes Goal 4.3: Promoting the growth of a public TVET College system that is responsive to sector, local, regional and national skills needs and priorities Goal 4.4: Addressing the low level of youth and adult language and numeracy skills to enable additional training

Part 2: NSDS III Implementation Progress Goal 4.5: Encouraging better use of workplace-based skills development Goal 4.6: Encouraging and supporting cooperatives, small enterprises, worker-initiated, NGO and community training initiatives Goal 4.7: Increasing public sector capacity for improved service delivery and supporting the building of a developmental state Goal 4.8: Building career and vocational guidance

Part 2: NSDS III Implementation Progress

Part 2: NSDS III Implementation Progress

Part 2: NSDS III Implementation Progress

Part 2: NSDS III Implementation Progress

Part 2: NSDS III Implementation Progress

Part 2: NSDS III Implementation Progress

Part 2: NSDS III Implementation Progress

Part 2: NSDS III Implementation Progress

Part 3:Seta Performance Review 34 The purpose of this report is to present a snapshot of the performance of SETAs during the 2014/15 financial year. Thematic areas of interest for this assessment are performance information, governance and financial performance. Sources of information used to conduct the assessment are SETA Annual Performance Plans (APPs), the Annual Reports (AR), the Auditor General’s Report (AG) and the AG management reports.

Performance Information 35 Link between goals, objectives, outputs, indicators and targets Alignment with National Plans Reporting against goals, objectives and outputs and consistency between the AR and AG reports Extent to which the indicators and targets are SMART Achievement of targets and reasons for deviation Discussion of challenges Plan to address challenges developed and implemented Evidence of performance improvement Evidence of evaluation of impact

Performance Information 36 Most of the SETA’s plans (14) show links between strategic outcome oriented goals, strategic objectives, performance indicators and targets. Most of the SETAs (15) have aligned their plans to the National Planning documents.  There are 6 SETAs that show only partial alignment with national plans, viz. CATHSSETA, FP&M, HWSETA, MICT, W&R and INSETA. The indicators of 9 SETAs adhere to the SMART principle.  Those of 6 other SETAs, viz. FP&M, LGSETA, MerSETA, MQA, CETA and INSETA are deemed to partially be SMART  The indicators for 6 of the SETAs, viz. AgriSETA, CATHSSETA, MICT, EWSETA, TETA and SASSETA did not comply to the SMART principle at all.

Performance Information 37 Reporting on strategic objectives between the Annual Report (AR) and Auditor-General (AG) report was consistent for 13 SETAs. Reporting on outputs between the AR and the AG report is consistent for 18 SETAs.  In the case of 3 SETAs, viz. CATHSSETA, MICT, and MQA, there is no consistency in reporting because the targets reported in the AR are not the same as those contained in the APP There are 16 SETAs where performance against outputs is reported in the Annual Report.  Partial reporting is observed in the case of 4 of the SETAs, viz. CATHSSETA, LGSETA, merSETA and EWSETA. Reasons why this is deemed partial include differences in targets in the AR and the APP or not all the APP targets are reported in the Annual Report.

Performance Information 38 The targets in the APP were met by 7 SETAs.  For 10 SETAs, the extent of achievement was deemed to be partial because they missed a few of their targets, these SETAs are AgriSETA, FoodBev, FP&M, merSETA, MQA, W&RSETA, ETDP, TETA and CETA.  The majority of the targets were not met in the case of 4 SETAs, viz. BANKSETA, CATHSSETA, LGSETA and PSETA. Reasons for deviation from targets are deemed credible for 9 SETAs. In the case of 7 SETAs, viz. AgriSETA, FASSET, LGSETA, MQA, SASSETA, EWSETA and PSETA, the reasons are deemed to be partly credible because it is only in a few cases where credibility is questioned

Performance Information 39 There are 6 SETAs where there is evidence that a plan to address the challenges identified in the annual report was developed and implemented.  In the case of BANKSETA, CATHSSETA, AgriSETA, CETA, CHIETA, FoodBev, HWSETA, merSETA, MQA, PSETA, Services SETA, W&R SETA, INSETA, TETA and EWSETA there is no indication in the annual report that plans have been put in place to deal with the challenges. There is evidence of improvements in audit outcomes for 11 SETAs based on comparing AG findings for 2014/15 and 2013/14 There is evidence that performance against strategic goals is assessed for 6 SETAs.  The remainder of the SETAs, viz. AgriSETA, BankSETA, CATHSETA, CETA, FoodBev, HWSETA, merSETA, MICT, PSETA, Service SETA, W&R SETA, INSETA, EWSETA, TETA and SASSETA present no evidence that such assessments are conducted.

Governance 40 With the exception of the SETAs that had no boards because they were under administration, the composition of all except the MICT were in line with the constitution. MICT had more employer representatives (7) than labour (5) The number of board meetings for all but 2 of the SETAs is deemed appropriate.  The number of meetings for the FoodBev and AgriSETA was 13 each, which is deemed excessive based on the above criterion.  Three SETAs, viz. CATHSSETA, LGSETA and SASSETA were under administration and had no board meetings. All the SETAs except the 3 under administration had all board sub- committees. In the case of the MICT. The governance and strategy sub- committee had not been constituted. Of the three SETAs that were under administration, the AG reports improvements in the case of the LGSETA and CATHSSETA. Adverse comments are given by the AG in relation to internal control environments of 6 of the SETAs, viz. CATHSSETA, EWSETA, FoodBev, FP&M SETA, merSETA and MQA.

Financial Information 41 The SETAs are faced we a challenge of linking budgets to strategic objectives and/or outputs. Majority of the SETAs have variances between budgets and expenditure. It is only in the CHIETA and EWSETA that according to the review panel, variances were (less than 10%) All, except 4, SETAs reported surplus funds for the 2014/15 financial year.  The SETAs that either had deficits or did not report surplus funds are AgriSETA, FP&M SETA, INSETA and SASSETA.  Reasons provided include late receipt of levy income from government departments, the effect of new grant regulations that increased the discretionary grant allocations, National Treasury expenditure ceilings and transfers from the NSF that were not budgeted for.

Performance Summary 42 The planning capacity of SETAs is weak.  A number of SETAs have misaligned goals, objectives, outputs, indicators and targets. SETAs should improve the quality of indicators and targets, which are often not SMART.  There is widespread challenge to meet targets. Planning documents do not always reflect analysis of and responding to the implications of national development strategies such as the NDP. – There is little attention paid to tracking and reporting on performance against the impacts. – This reflects a lack of appreciation of the important role that SETAs have to play in the pursuit of national development priorities.

Governance Summary 43 The constitution of SETA boards is largely in line with the standard constitution.  SETAs are also generally in compliance in terms of established board sub-committees.  There are a few cases where the number of board meetings is excessive. This may indicate a failure to separate responsibility for governance and operations  SETAs under administration have shown a general trend of improvement under administration in terms of audit findings. It is not possible to say whether administration has improved performance by studying one year of plans and reports. There would need to be a review of at least two years. Audit findings for SETAs are generally positive.  There is a general problem in the area of budget management with SETAs showing huge negative variances between budgets and actuals.  SETAs are sitting on significant amounts of surplus funds.

Conclusion 44 Once the repositioning/business case is concluded, the NSA will be appropriately capacitated to optimally execute its monitoring and evaluation as well as advisory mandate

Thank You