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CONSTRUCTON Education and Training Authority

The CETA Annual Report 2009 highlights the organization's commitment to training in the construction sector and its strategic priorities. It covers key performance highlights, governance and compliance matters, financial performance, and the turnaround strategy.

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CONSTRUCTON Education and Training Authority

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  1. CONSTRUCTON Education and Training Authority Annual Report Presentation 3rd November 2009 CETA - Annual Report 2009

  2. CETA`s Vision T o be a service excellence –driven skills development authority, supporting a sustainable and competent construction sector • Mission To promote and ensure quality of education and training in the construction sector • CETA`s Mandate To influence the course of training and skills development in the construction sector by implementing various learning Programmes CETA - Annual Report 2009 CETA - Annual Report 2009

  3. INDEX • 1. Our commitment to training • 2. Strategic priorities • 3. Key performance highlights • 4. Governance and compliance matters • 5. Financial performance • 6. Audit qualifications • 7. Turnaround strategy • 8. Conclusion CETA - Annual Report 2009 CETA - Annual Report 2009

  4. 1. OUR COMMITMENT TO TRAINING • Annual Negotiated Service Level Agreement - CETA and the Department of Labour (DoL) enter into agreement for CETA to achieve specific NSDS targets on annual basis e.g. Learnerships and Skills Programmes • Sector Skills Plan - This is a researched document that guides the sectors skills requirement and implementation of learning programmes • Discretionary Grant Fund - CETA has committed R172m for training benefiting 18.1 and 18.2 learners CETA - Annual Report 2009 CETA - Annual Report 2009

  5. Mandatory Grant • various construction employers claimed and benefited from the mandatory grant. This grant is prescribed by the Skills Development Act. • CETA `s Strategic Plan • developed operational document that outline strategic goal to achieve the Sector Skills Plan • organogram that is aligned to strategic plan to deliver strategic priorities CETA - Annual Report 2009 CETA - Annual Report 2009

  6. Governance Structure • board that comprises of Industry role players, that support the implementation of CETA`s strategic plan • CETA `s Committees • Finance, Risk Management, • Skills development, ETQA, • Audit, Remuneration and • three national sub-sectors that is - Built Environment Professionals - Construction - Construction material manufacturing CETA - Annual Report 2009 CETA - Annual Report 2009

  7. 2. STRATEGIC PRIORITIES • Construction Centre of Excellence • the challenge was that employers were not training their employees and CETA was struggling to achieve and meet the NSDS targets .Hence the establishment of CCOE`s • Establishment of working relationship • signing of MOU`s with social partners in promoting skills development initiatives - Various government Departments e.g. Human Settlement, National and Provincial Departments of Public works, Department of Roads and Transport , Umsobomvu, IDT, SANRAL, CIDB and various FET colleges. CETA - Annual Report 2009 CETA - Annual Report 2009

  8. Communication • purpose is to Improve working relationship with internal and external stakeholders and share CETA`s learning programmes, bursaries, submitting of WSP/ATR and accreditation of Service Providers • conducted National and Provincial road shows • career exhibitions, construction weeks • Financial Viability • support the Industry to train learners on various learning programmes • ensure that the CETA is financial sustainable and viable to support and achieve its mandate • there should be continuity of CETA activities CETA - Annual Report 2009 CETA - Annual Report 2009

  9. Delivery of Learning Programmes for 18.1 and 18.2 • ensure that CETA is committing R172m to support training in the Industry through projects • Increasing the submission of WSP/ATR by participating employers • ensure that participating construction employers receive their mandatory grant as prescribed by the Act • Accrediting service Providers to deliver CETA`s learning programmes • ensure that service providers are accredited to deliver various learning programmes CETA - Annual Report 2009 CETA - Annual Report 2009

  10. 3. KEY PERFORMANCE HIGHILGHTS • Increase submissions of WSP/ATR • There was significant increase in submission of WSP/ATR from 1331 in 2007/08 to 1511 in 2008/09 • This shows that there were high number of companies benefited from mandatory grant • Although this does not translate into training. • Supporting of SMME`s • Construction Industry is made out of small , medium to large firms. (Page 33 of the Annual Report) • CETA has made significant strides in supporting SMME companies . (Page 41 of the Annual Report) • Supporting of women in Construction • CETA has jointly supported women in Construction with Department of Human Settlement – 30 women CETA - Annual Report 2009 CETA - Annual Report 2009

  11. Bursary scheme • CETA is annually budgeting to support the young South African who are interested in joining the construction Industry. • Bursaries were approved for 500 learners in 2009. • 39 learners who received bursaries in 2007/08 graduated on the following qualification : (Page 37 of the Annual Report) • Civil engineering • Construction managers • Quantity surveyors • Property Studies • Architecture • Town and Regional Planning CETA - Annual Report 2009 CETA - Annual Report 2009

  12. CETA - Annual Report 2009 • International relationship • CETA has established a working relationship with SADEC countries (i.e. Malawi, Zimbabwe, Zambia, Zimbabwe and Mozambique) and Spain, Germany and UK to share knowledge and experience. • Human resource development • Capacity building for staff and board members on Corporate Governance, PFMA and King Code • Implement Performance Management System • CETA has got policies that support staff development e.g. staff loans/bursary CETA - Annual Report 2009

  13. Annual Service Level Agreement – Page 41 of the Annual Report • CETA has entered into annual service delivery plan to achieve the NSDS target with DoL • This has been implemented to achieve various learning programmes • Forging working Relationship with small , medium and big companies- National and Provincial Road shows , sharing CETA programmes and information CETA - Annual Report 2009 CETA - Annual Report 2009

  14. 4. GOVERNANCE AND COMPLIANCE MATTERS • Audit Committee • Had a functioning audit committee in place to ensure compliance. • Internal Auditors • New Internal Auditors were appointed towards of 2008. • They conducted their business accordingly • Risk management committee • The committee has proven itself in ensuring that issues of risk within the CETA are properly identified and addressed CETA - Annual Report 2009 CETA - Annual Report 2009

  15. Finance committee • The finance committee is made out of Labour, employers and government representatives. • This committee meet once a month to discuss financial issues and advise the board accordingly • Governance structures • Ensure that that custodians of corporate governance are knowledgeable and well informed of their responsibilities • Regular and declaration of interest and checking any conflict of interest. CETA - Annual Report 2009 CETA - Annual Report 2009

  16. 5. FINANCIAL HIGHLIGHTS • 5.1 Revenue • Levy income: Administration amounted to R39.8m (R31.3m in 2008) • Levy income: Employer Grants amounted to R186.9m (R150.6m in 2008) • Levy income: Discretionary Grants amounted to R74.7m (R60.2m in 2008) • Investment income amounted to R30.2m (R12.1m in 2008) CETA - Annual Report 2009 CETA - Annual Report 2009

  17. 5. FINANCIAL HIGHLIGHTS • 5.2 Expenses • Mandatory Grants net disbursement was R95.1m (R83.3m in 2008) • Project and Learnership expenditure amounts to R16.9m (R23.6m in 2008) • Administration expenses amounted R36.7m (R32.7m in 2008) CETA - Annual Report 2009 CETA - Annual Report 2009

  18. 5. FINANCIAL HIGHLIGHTS • 5.3 Cash at bank • A total of R377.2m was in bank at year end (R210.6m in 2008) • R257.5m in current account (R103.4m in 2008) • R119.7m in investment accounts (R107.1m in 2008) CETA - Annual Report 2009 CETA - Annual Report 2009

  19. 6. AUDIT QUALIFICATION- Basis for qualification • 6.1 Employer grants expenses and payables • Inadequate supporting information for our opening balances for employer grants liability led Auditor-General to be unable to evaluate opening balances. This is due to WSP information lost in 2005/6. Solution: • We have set-up a project plan to resolve this problem. Auditor-General will review our proposed solution by November. • Also, we have implemented adequate back-up system and more effective document control. CETA - Annual Report 2009 CETA - Annual Report 2009

  20. 6. AUDIT QUALIFICATION- Basis for qualification • 6.2 Related parties • Significant weaknesses regarding the identification and recording of related-party transactions. Solution: • We have implemented procedures to identify, record and monitor related-party transactions. CETA - Annual Report 2009 CETA - Annual Report 2009

  21. 6. AUDIT QUALIFICATION- Basis for qualification • 6.3 Discretionary grants expenses and payables • A prior year amount relating to learnership and project creditors was not cleared although no valid obligation existed at year-end Solution: • The prior year amount has been cleared and controls to assess the validity and completeness of the balances were implemented. CETA - Annual Report 2009 CETA - Annual Report 2009

  22. 6. AUDIT QUALIFICATION- Emphasis of matter • 6.4 Significant uncertainties • Contingent liabilities due to pending litigations and contingent asset due to pending settlements of debts with suppliers were not recorded in financials due to the uncertainty of the outcome. Solution: • Forensic auditors are close to close completing the matter. The estimated completion date is November 2009. CETA - Annual Report 2009 CETA - Annual Report 2009

  23. 6. AUDIT QUALIFICATION- Emphasis of matter • 6.5 Unauthorized, irregular or fruitless and wasteful expenditure • Irregular expenditure to the amount of R92.7m incurred in 2008 was not condoned. • Fruitless and wasteful expenditure to the amount of R1.2m incurred in 2008 was not condoned. • Irregular expenditure to the amount of R7.7m was not condoned. This was mainly due to non-adherence to our procurement policy. • Solution: • Application for condonment has been made to National Treasury. • Monitoring of compliance with PFMA and Treasury Regulations have been strengthened. CETA - Annual Report 2009 CETA - Annual Report 2009

  24. 7. TURNAROUND STRATEGY CETA set a turnaround strategy to improve service delivery and to improve internal controls environment Five areas were identified to be critical CETA’s strategic plan Risk management Staff retention Control environment Continuous engagement and development CETA - Annual Report 2009 CETA - Annual Report 2009

  25. 7. TURNAROUND STRATEGY (Cont…) • CETA`s strategic Plan • Reviewed strategic plan accordingly with new organogram to deliver CETA mandate and it outlines issues of succession planning • Risk management • Established risk management committee that addresses compliance issues and internal controls and systems • Improved Integrated management system • Staff members are made aware of CETA`s QMS • Improved working relation between Internal Auditors and Audit committee CETA - Annual Report 2009 CETA - Annual Report 2009

  26. 7. TURNAROUND STRATEGY (cont…) Staff retention Continuous benchmarking with other setas w.r.t salaries and conditions of employment or working relation Addressing the issue of succession planning within the CETA Implementation of CETA`s retention strategy Encouraging CETA `s staff members to take advantage of CETA`s bursary scheme/study loan CETA - Annual Report 2009 CETA - Annual Report 2009

  27. 7. TURNAROUND STRATEGY (Cont…) CETA - Annual Report 2009 • Control environment • CETA has approved the new organogram which is aligned to support CETA strategy. • The work is underway to review roles and responsibilities for all positions in the structure to improve accountability • Work procedures are also under review • Development of Personnel Development Plans to address skills gap • Improving and strengthening working relation between Internal Auditors and Audit committee and risk management committee with purpose of improving internal controls CETA - Annual Report 2009

  28. 7. TURNAROUND STRATEGY (Cont…) CETA - Annual Report 2009 • Continuous engagement and development • Continue to support CETA`s stakeholders with various projects to advance and influence the course of training • Develop required systems, policies and procedures to address non compliance issues • Report all non compliance issues on monthly and quarterly basis for resolution • Identify the prior year errors and address them accordingly within specific timeframe. Work with relevant Departments that is DoL and AG to address the financial challenges CETA - Annual Report 2009

  29. 8. CONCLUSION CETA IS A PUBLIC ENTITY THAT SUPPORT THE GOVERNMENT PROGRAMMES TO ALIVIATE POVERTY AND PROMOTE SKILLS DEVELOPMENT INITIATIVE IN THIS COUNTRY. CETA COMMIT ITSELF TO ADVANCE TRAINING IN THE CONSTRUCTION SECTOR

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