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ANNUAL REPORT 2014/15

ANNUAL REPORT 2014/15. NATIONAL SKILLS FUND. Presentation to the Portfolio Committee on Higher Education and Training 28 October 2015. Content. OVERVIEW OF NSF MANDATE LEGISLATIVE MANDATE VISION & MISSION BRIEF STRATEGIC OVERVIEW PERFORMANCE PER PROGRAMME AUDITOR-GENERAL REPORT

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ANNUAL REPORT 2014/15

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  1. ANNUAL REPORT 2014/15 NATIONAL SKILLS FUND Presentation to the Portfolio Committee on Higher Education and Training 28 October 2015

  2. Content • OVERVIEW OF NSF MANDATE • LEGISLATIVE MANDATE • VISION &MISSION • BRIEF STRATEGIC OVERVIEW • PERFORMANCE PER PROGRAMME • AUDITOR-GENERAL REPORT • FINANCIAL OVERVIEW

  3. 1. OVERVIEW OF NSF MANDATE • Catalytic fund which enables government to drive key skills strategies as well as meeting the training needs of the unemployed, non levy-paying cooperatives, etc. • National resource which initiates as well as responds to national skills priorities • Used to target gaps and complement resource shortages for national skills priorities • National Skills Fund priorities as directed by the NSDS III: • Advancement of the Human Resource Development Strategy • Priorities identified by the Minister after consulting with the National Skills Authority to build the capacity of social partners (constituencies) and strengthen their role in the delivery of the National Skills Development Strategy • Projects aligned to the NSDS which supports government priorities, e.g. new economic growth path, Industrial Policy Action Plan, rural development, green economy, etc.

  4. 1. OVERVIEW OF NSF MANDATE • The role of the NSF as envisaged in the White Paper for Post-School Education and Training (PSET): • Enable the achievement of government’s strategic goals and objectives • Responsible for skills development aligned to national development strategies and priorities • Enable linkages between the skills system and other post-schooling sub-systems that will be put in place • Beyond the post-schooling system the NSF will fund wider government strategies such as youth programmes, building small businesses and cooperatives, and rural development • Support non-formal basic adult education through public agencies, NGOs and non-profit organisations • Support research, development and innovation across sectors to a strategic level as this is fundamental to the development of a skilled nation, attracting investment and achieving shared growth and development within the country

  5. 2. LEGISLATIVE MANDATE ESTABLISHED • The National Skills Fund was established in 1999 in terms of section 27 of the Skills Development Act, No 97 of 1998. • The Director-General of Higher Education and Training is the accounting authority of the National Skills Fund as stipulated in section 29(1) of the Skills Development Act. • The Director-General shall, subject to the laws that govern the public service, appoint a person to be the executive officer of the NSF, who will, upon such appointment, be within the employ of the public service. Within the framework of the Director-General’s delegations of authority, the day-to-day operations of the NSF are managed by the Executive Officer. • In accordance with above legislation, all current NSF employees are within the employ of the public service as employees of the Department of Higher Education and Training (DHET).

  6. 2. LEGISLATIVE MANDATE LISTED AS SCHEDULE 3A PUBLIC ENTITY • Listed on 12 October 2012 as a Schedule 3A Public Entity in terms of the PFMA, retrospectively effective from 1 April 2012. TO FUND • Skills development projects of National Priority as per NSDS – sec 28 of SDA • Skills development projects for the achievement of the SDA determined by the Director-General, within the purposes of the Act – sec 28 of SDA • Activities to achieve national standard of good practice in skills development – sec 30B of SDA • Administration of the Fund (within 10% limit) – sec 28 of SDA

  7. 3. VISION AND MISSION OUR VISION Funding to skill our nation OUR MISSION To provide funding for national skills development towards a capable workforce for an inclusive growth path

  8. 4. BRIEF STRATEGIC OVERVIEW Highlights for 2014/15 • R3.2 BILLION INVESTED TOWARDS SKILLS DEVELOPMENT R2.319 billion towards education and training of learners 72% 26% R827 million towards strengthening the PSET system 2% R53.8 million towards Research

  9. 4. BRIEF STRATEGIC OVERVIEW Highlights for 2014/15 • 62 617 learners funded for training (from R2.319 billion)

  10. 4. BRIEF STRATEGIC OVERVIEW

  11. 4. BRIEF STRATEGIC OVERVIEW Highlights for 2014/15 • R827 million towards strengthening and building key priorities in the PSET system • R19.526 million towards strengthening SA Artisan Development System • Operationalising NAMB and NADSC at Ekurhuleni East TVET College. • R58.513 million towards skills development dialogue, skills advocacy, skills marketing and communications and social partners constituency members capacity building • Supporting the work of the National Skills Authority • R8.989 million towards establishing a credible mechanism for skills planning • R3.072 million towards establishing central application services • R2.554 million towards strengthening open and distance learning within PSET • R46.408 million towards strengthening career advice and development • National Career Advice Portal, Career Advice Helpline, Mass Communication Campaign, Walk-in Services for Locals

  12. 4. BRIEF STRATEGIC OVERVIEW Highlights for 2014/15 • R827 million towards strengthening and building key PSET system priorities • R7.237 million invested in curriculum development • AET curriculum and HIV/AIDS issues incorporated into TVET curricula • R7.136 million towards supporting Strategic Projects Unit for Strategic Infrastructure Projects special projects unit and DHET Development Support • R26.621 million towards strengthening good governance and administration at Universities • R208.996 million towards expanding medical and veterinary facilities at University of Pretoria • R78.84 million towards establishing work-integrated learning facilities for engineering students at University of Johannesburg • R8.794 million towards establishing renewable energy training facilities (SARETEC) at Cape Peninsula University of Technology

  13. 4. BRIEF STRATEGIC OVERVIEW Highlights for 2014/15 • R827 million towards strengthening and building key PSET system priorities • R6.366 million towards establishing state of the art hair testing and research laboratory at the University of Cape Town • R5.55 million towards installing modern teaching and learning technology and palisade fencing at Mthatha Campus of Walter Sisulu University • R72.481 million towards strengthening good governance and administration at TVET colleges • SAICA CFO and Human Resource project • R1.305 million towards improving quality of curriculum offered at TVET colleges • R220.221 million towards TVET college infrastructure development • Physical construction of the first 3 new TVET college campuses has begun namely at Bhambanana, Nkandla and Thabazimbi. • R48 million towards a number of other interventions (E.g. Expanding capacity of national examinations and assessments, establishing SAIVCET, scanning text books etc.)

  14. 4. BRIEF STRATEGIC OVERVIEW New Medical Training facilities at University of Pretoria New Veterinary Facilities at Onderstepoort, University of Pretoria New TVET college campus at Thabazimbi under construction

  15. 4. BRIEF STRATEGIC OVERVIEW Highlights for 2014/15 • R53.763 million invested in research • Skills legislation review and research work through NSA • Research on the implementation of transformation, social cohesion and the elimination of discrimination in the PSET sector • Initiatives aimed at expanding research in the area of Humanities and Social Sciences, whilst incorporating the African perspective thereon • Research and public engagement in the PSET system White Paper) • Research aimed at HRDCSA • Research aimed at improving Mathematics and Science • Labour Market Intelligence Project Research • Research conducted through Ministerial Task Teams of the following: • Recognition of Prior Learning • African Languages in Universities • SETAs • University funding review; and • Community Education and Training Centres

  16. 5. PROGRAMME PERFORMANCE ON PREDETERMINED OBJECTIVES PROGRAMME 1: SKILLS DEVELOPMENT FUNDING Purpose: To invest in projects identified in the National Skills Development Strategy (NSDS) as national priorities and invest in projects related to the achievement of the Skills Development Act as per the discretion of the Director-General. STRATEGIC OBJECTIVES 1 AND 2

  17. 5. PROGRAMME PERFORMANCE ON PREDETERMINED OBJECTIVES PROGRAMME 2: NSF OPERATIONS Purpose: Drive the National Skills Fund towards excellence in skills development funding by enhancing the administrative and operational excellence of the National Skills Fund STRATEGIC OBJECTIVE 3

  18. 6. AUDITOR-GENERAL REPORT The NSF received an unqualified audit opinion. Key matters raised by the Auditor-General: Restatement of corresponding figures (2013/14) as a result of errors discovered during the year ended 31 March 2014. Irregular expenditure incurred related to the TVET college infrastructure development as disclosed in note 33 to Annual Financial Statements (page 186 to 187). Usefulness of reported performance information: 33% of the performance targets were not specific and measurable. Reliability of reported performance information: 33% of the performance targets were not reliable when compared to source information of evidence provided.

  19. 6. AUDITOR-GENERAL REPORT Root-causes of above key matters as identified by the Auditor-General: NSF does not have a unit that is responsible for managing performance information. NSF standard operating procedures for performance information have not been updated to include current procedures and processes followed for recording of data, validation of data, data approval, data storage and security and protection of confidential data. NSF does not have a proper record and information management system in place for financial and performance reporting. Daily and monthly processing and reconciling of transactions were performed on a cash basis and not the accrual basis of accounting. The NSF developed an action plan to address the matters raised by the Auditor-General and in turn, incorporated into the performance agreements of all senior managers.

  20. 7. FINANCIAL OVERVIEW Statement of Financial Position as at 31 March 2015 Increase in PPE and intangible assets of R10.7 million consists mainly of ICT infrastructure and furniture purchased during the year as a result of relocating offices. Increase in TVET college infrastructure assets of R91.412 million relates to physical construction work that started at 3 new TVET college campuses. Decrease in receivables from non-exchange transactions of R99.336 million is as a result of receipts from SETAs regarding their contribution towards TVET college infrastructure development. Increase in investments and cash and cash equivalents from R3.242 billion is mainly as a result of SETA uncommitted surplus funds transferred from SETAs to NSF, overpayments made by other parties to NSF and decrease in deferred expenditure.

  21. 7. FINANCIAL OVERVIEW Statement of Financial Position as at 31 March 2015 Increase in liabilities of R227.456 million mainly due to SETA uncommitted surplus overpayment by Services SETA of R185.378 million and levy overpayment by DHET of R16.738 million. Increase in Capital and Reserves of R2.627 billion mainly due to SETA uncommitted surpluses that have been transferred to the NSF.

  22. 7. FINANCIAL OVERVIEW Statement of Financial Performance for the year ended 31 March 2015 9.37% increase in Skills Development Levy (SDL) [consistent with increases in SDL for past 5 years] Income from SETAs consist of: 2014/15: Uncommitted surpluses transferred to NSF 2013/14: SETAs’ contribution towards TVET college infrastructure development Increase in finance income of 23% due to an increase in investments.

  23. 7. FINANCIAL OVERVIEW Statement of Financial Performance for the year ended 31 March 2015 Skills development expenses increased by R147.097 million. Employee costs increased by 19% mainly due to additional project management staff appointed and salary adjustments based on inflation. Operating expenses increased mainly due to work performed by NSF under NSF’s organisational transformation project (Project Siyaphambili) aimed at improving the efficiency and effectiveness of the NSF. PIC investment management fees, bank charges and SARS levy collection costs remained in line with that of the prior year. Depreciation increased as a result of an increase in PPE and intangible assets.

  24. 7. FINANCIAL OVERVIEW Current Position (2014/15): Investment in skills development is on par with the NSF's total revenue (excl. additional income from SETAs) at R3.2 billion. NSF’s INVESTMENT IN SKILLS DEVELOPMENT REMAINS ON PAR WITH ITS REVENUE

  25. 7. FINANCIAL OVERVIEW NSF REMAINS A COST-EFFICIENT ORGANISATION

  26. 7. FINANCIAL OVERVIEW Enkosi. Ngiyabonga. Ndi a livhuwa. Baie dankie. Re a leboga. Siyabonga kakhulu. Hi khense ngopfu. Thank you. Ke a leboha.

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