1. Click to edit Master subtitle style 9/10/10 111 Report on PSETA Presentation to Portfolio Committee on Public Service and Administration 8 September 2010

2. 9/10/10 222 Establishment  PSETA established in March 2000 by Minister of Labour ito Skills Development Act, 1998 (SDA)  2001 Cabinet decision PSETA to be distinct unit within DPSA its administration to be funded from DPSA’s budget DPSA to provide secretariat services to PSETA

3. 9/10/10 333 Corporate form  PSETA listed as public entity under Public Finance Management Act in Feb 2001, delisted in Nov 2001 & listed again in April 2006  Skills Development Act & PSETA’s Constitution require that PSETA be constituted & function as separate legal entity  Following listing of PSETA as public entity in 2006 DPSA staff worked at PSETA on secondment basis  Current certificate of establishment lapses on 31 March 2011

4. 9/10/10 444 Scope  PSETA’s scope of coverage all government departments & provincial administrations for transverse skills most national departments for all areas of skills parastatals not falling under another SETA, for all areas of skills

5. 9/10/10 555 Role clarification – PSETA, PALAMA & DPSA  PSETA’s main functions Develop & implement sector skills plan by establishing learnerships within framework of National Skills Development Strategy & HRD Strategic Framework for Public Service Approve workplace skills plans (WSP) & monitor implementation Establish learnerships & skills programmes and register learnership agreements (if required) Accredit training providers & training for compliance with National Qualification Framework Allocate grants to employers, providers & employees (s10 of Skills Development Act)

6. 9/10/10 666 Role clarification – PSETA, PALAMA & DPSA  PALAMA Must provide training and conduct examinations/tests for public service as DG: PALAMA determines with approval of MPSA or as determined in regulations as requirement for appointment/transfer May issue diplomas/certificates to persons who pass examinations (Section 4 of Public Service Act)

7. 9/10/10 777 Role clarification – PSETA, PALAMA & DPSA  MPSA must set norms and standards for public service on training & development in form of regulations, determinations & directives DPSA to develop these norms & standards (Section 3(1)(c), read with def of “employment practice” in s1, of Public Service Act)

8. 9/10/10 88 Functiondpsapsetapalama Learnerships (learning programmes) Norms & standards: Polices, guidelines, M&E, targets Accreditation & QA ; establish learning programmes; Register agreements Monitor provision Training & Assessment of learning InternshipsNorms & standards: Polices, guidelines, M&E, targets Reporting to DHETLearner certification Workplace learning with respect to PSA and PS Regs Norms & standards: Polices, guidelines, M&E, targets Monitor provision; Accreditation Assessment of learning; Development of Training programmes E-learningNorms & standards: Polices, guidelines, M&E, targets AccreditationDevelop & offer e- learning training programmes

9. 9/10/10 99 Functiondpsapsetapalama Recognition of Prior Learning Norms & standards: Polices, guidelines, M&E, targets QA & CertificationCoordinate assessment ABETNorms & standards: Polices, guidelines, M&E, targets QA & certification & monitoring provision FETC and HEI Partnerships Norms & standards: Polices, guidelines, M&E, targets QA & certification & monitoring provision; MoUs MoUs, Programme evaluation; QA & certification Partnerships with Professional Bodies Norms & standards: Polices, guidelines, M&E, targets QA & certification & monitoring provision; MoUs HR Planning and Supply Management Norms & standards: Polices, guidelines, M&E, targets Sector Skills PlansCo-ordination of training

10. 9/10/10 101010 Transfer of administration of Skills Development Act (1)  President transferred administration of SETA related provisions of Skills Development Act (SDA) from Minister of Labour to Minister of Higher Education & Training Effective 1 November 2009  Minister & Department of Higher Education & Training now tasked with ensuring that all SETAs, including PSETA, complies with SDA

11. 9/10/10 111111 Transfer of administration of Skills Development Act (2)  Transfer of SDA to MHET did not change relationship between PSETA & DPSA Operational budget for PSETA still included in DPSA budget as transfer payment MPSA in terms of PSETA Constitution appoints eight members on PSETA Board representing the State as employer and one expert

12. 9/10/10 121212 PSETA’s financial report – background (1)  Before 2009, PSETA did not have properly documented financial history  No properly structured accounting & recording system to effectively give account of the PSETA’s history  At end of 2008/09 year, environment was characterised by poor record keeping, absence of key documentation & practically no accounting & recording system  Same conclusion was reached & reported by Auditor General (AG) in 2007/08 and 2008/09 report  This situation resulted in AG giving blanket disclaimer on PSETA’s financial records

13. 9/10/10 131313 PSETA’s financial report – background (2)  Before 2007/08 financial year, PSETA had only been subjected to external audit in 2000/01 financial year  Therefore no independent review of PSETA’s operations for 6 years, factor which contributed to deterioration in management, accounting, reporting, monitoring & review systems at PSETA

14. 9/10/10 141414 PSETA’s financial report – remedial steps (1)  From Nov 2009 concerted effort to reconstruct PSETA’s financial records – completed in March 2010 Involved tracing of all PSETA transactions, identifying purpose & source relevant supporting documentation from its inception in 2000  Resulted in financial statements containing balances with proper audit trail  Financial statements for 2009/10 prepared based on reconstructed information  Resulted in much improved audit report for 2009/10

15. 9/10/10 151515 PSETA’s financial report – remedial steps (2)  Further progress Auditors appointed in March 2010 & review of 2009/10 conducted Audit Committee appointed in January 2010 Financial policies & procedures developed & approved by PSETA Board Currently being reviewed with DPSA’s assistance  Other operational policies developed for approval e.g. declaration of interest, discretionary grant policies

16. 9/10/10 161616 PSETA’s financial report – remedial steps (3)  Further progress (cont) Risk assessment exercise commenced in May 2010 and register & report developed for approval Recording & accounting system procured

17. 9/10/10 171717 PSETA’s financial report – fraud  PSETA was victim to fraud by one of its Finance Manager in 2005  Bulk of fraud occurred on NSF account  SIU & SAPS investigation resulted in conviction of former Finance Manager  Final PWC forensic report was issued on 1 July 2010 report confirmed that at least R1.4 million was defrauded by former Finance Manager  In addition potential of R10.8 million unaccounted for and was reported & recommended for further investigation by SIU

18. 9/10/10 181818 PSETA & DPSA Memorandum of Understanding  Towards effective functioning of PSETA & facilitating PSETA’s independence, PSETA and DPSA concluded a MOU Effective 20 March 2010 Updated 19 August 2010  MOU deals with- Transfer of funds, staff & work tools of (e.g. furniture, laptops, etc) to PSETA DPSA staff seconded to PSETA choice whether to remain DPSA employees or to transfer to PSETA Corporate management & administrative support to PSETA by DPSA

19. 9/10/10 191919 MOU (cont) & staff appointments  Monitoring of implementation of MoU is taking place through regular standing meetings between PSETA & DPSA  PSETA & DPSA having regular meetings with Accountant-General Office to assist PSETA to establish required financial management & internal control systems & deal with audit queries  CEO & CFO positions filled in August 2010  Support staff is currently being recruited and staff compliment grown from 15 in 2009 to 26 New staff appointed by PSETA and not DPSA

20. 9/10/10 202020 Placement of PSETA under administration  In Aug 2010 MHET indicated that he intends to proceed with placing PSETA under administration & that DG: HET will shortly appoint administrator Administrator will take over functions of Board Administration (staff) of PSETA will continue

21. 9/10/10 212121 DHET, DPSA & NT Task Team  Task team regarding PSETA set up to deal with among others Role of PSETA vis-à-vis other role players Also collaboration between DHET & DPSA to strengthen skills development & HR development across public service  Consisting of 4 officials each of DHET & DPSA and 2 NT officials  Work of task team to feed into SETA re-accreditation process to be completed end Sept

22. 9/10/10 222222 Training budget of national & provincial departments / public entities  National & provincial departments must budget for at least 1% of its payroll for training & education of its employees may contribute funds to a SETA does not pay skills levy ito Skills Development Levy Act, 1999 Same applies to national & provincial public entities if 80% or more of their expenditure is defrayed directly/indirectly from funds voted by Parliament

23. 9/10/10 232323 PSETA’s budget (1)  Allocations from National Skills Fund not transferred via DPSA to PSETA but directly to PSETA’s bank account/s opened for this purpose  Operational/administrative budget for PSETA provided for via transfer payment on DPSA’s budget vote  Transfer payment from DPSA’s budget to PSETA is conditional on written assurance that it implements effective, efficient & transparent financial management & internal control systems (s38(1)(j) of PFMA)

24. 9/10/10 242424 PSETA’s budget (2)  2009/10 No transfer payment to PSETA NT approved that transfer amount be reclassified to become part of DPSA budget However during financial year amount was ring- fenced & used for PSETA operational expenditure, including remuneration of DPSA staff seconded to PSETA Of transfer amount of R21,842, an amount of R21,001 was spent in 2009/10 (96,1%)

25. 9/10/10 252525 PSETA’s budget (3)  2010/11 Transfer amount for PSETA = R19 993 When PSETA provides written assurance, DPSA will transfer funds on quarterly basis based on projections

26. 9/10/10 2626 End