The catalyst for enhanced skills, economic growth and employability
The catalyst for enhanced skills, economic growth and employability
AnnuAl RepoRt2012/2013
Annual Report 2012/13
Vision
World-class education and training for the Chemical Sector.
Mission
The CHIETA contributes to sustainable development through facilitating the provision of skills for growth in the Chemical Sector.
The catalyst for enhanced skills, economic growth and employability
1
AnnuAl RepoRt2012/2013
Annual Report 2012/13
2
Acronyms
ABET Adult Basic Education and TrainingAIDS Acquired Immune Deficiency SyndromeAQP Assessment Quality PartnerATR Annual Training ReportATU Apprentice Training UnitBBBEE Broad-Based Black Economic
EmpowermentCEPPWAWU Chemical Energy Paper Printing Wood
Allied Workers Union.CBO Community-Based OrganisationCBC Comcast Business CommunicationsCHIETA Chemical Industries Education and Training
AuthorityCPUT Cape Peninsula University of TechnologyDG Director-GeneralDHET Department of Higher Education and
TrainingDoL Department of LabourDMU Data Management UnitDQP Development Quality PartnerDSAP Dual System Artisan ProjectDST Department of Science and TechnologyDTI Department of Trade and IndustryDTTC Decentralised Trade Test CentreDUT Durban University of TechnologyEEA Employment Equity ActETDQA Education Training and Development
Quality AssuranceETQA Education and Training Quality AssuranceFET Further Education and TrainingGMET Generic Manufacturing Engineering and
TechnologyGRAP Generally Recognised Accounting PracticeHDSA Historically Disadvantaged South AfricanHET Higher Education and TrainingHIV Human Immunodeficiency VirusHRD Human Resource DevelopmentHR Human ResourcesHSRC Human Sciences Research CouncilICAS Independent Complaints Advocacy ServiceISOE Institute for Sectoral and Occupational
ExcellenceLMIP Local Maximum Intensity ProjectionLP&QA Learning Programmes and Quality
Assurance MoA Memorandum of Agreement
MoU Memorandum of UnderstandingMUT Mangosuthu University of TechnologyNAMB National Artisan Moderating BodyNCV National Certificate VocationalNGO Non-Governmental OrganisationNQF National Qualification FrameworkNLPES National Legislative Programme Evaluation
SocietyNMMU Nelson Mandela Metropolitan UniversityNSDS National Skills-Development StrategyNSF National Skills FundOFO Organising Framework for OccupationsOGCM Ocean General Circulation ModelP1 Practical 1P2 Practical 2PIVOTOL Professional Vocation, Occupational,
Technical and Academic LearningPSDF Provincial Skills-Development ForumPFMA Public Finance Management ActQALA Quality Assurance of Learner AchievementsQCTO Quality Council for Trades and OccupationsRSA Regional Skills AdvisorRSF Regional Skills ForumRPL Recognition of Prior LearningSACWU South African Chemical Workers UnionSAGDA South African Graduates Development
AssociationSAOGA South African Oil and Gas AllianceSAPC South African Pharmacy CouncilSAPIA South African Petroleum Industry
AssociationSAQA South African Qualification AuthoritySDA Skills Development ActSDLA Skills-Development Levies ActSDC Skills-Development CommitteeSDF Skills-Development FacilitatorSEDA Small Enterprise Development AgencySETA Sector Education and Training AuthoritySLA Service-Level AgreementSME Subject Matter ExpertSMME Small, Medium and Micro EnterprisesSQMR SETA Quarterly Monitoring ReportSSP Sector Skills PlanUASA United Association of South AfricaUoT University of TechnologyWIL Workflow Intermediate Language WSP Workplace Skills PlanWSU Walter Sisulu University
The catalyst for enhanced skills, economic growth and employability
3
Acronyms .......................................................................................................................................................................... 2
Chairperson’s Report ..................................................................................................................................................... 4-5
Acting CEO’s Report ...................................................................................................................................................... 8-10
Research and Skills Planning ...................................................................................................................................... 12-14
Learning Programmes and Quality Assurance ............................................................................................................ 16-18◊ Education and Training Quality Assurance ◊ Apprentice Training
Grants and Strategic Projects ..................................................................................................................................... 20-32◊ Grants ◊ Strategic Projects ◊ Regions
Governance and Risk .................................................................................................................................................. 34-37
Human Resources ....................................................................................................................................................... 39-41
CHIETA Performance Report 2012/2013 .................................................................................................................... 43-60
Finance ....................................................................................................................................................................... 62-64
Report of the Audit Committee .................................................................................................................................. 65-66
Report of the Auditor-General ................................................................................................................................... 67-69
Report of the Accounting Authority ........................................................................................................................... 71-77
Annual Financial Statements for the Year ended 31 March 2013 ............................................................................ 78-110
Materiality and Significance Framework ................................................................................................................ 111-117
Contents
Annual Report 2012/13
4
Chairperson’s Report
As the Chemical Industries and Education Training Authority (CHIETA), we recognise that education and skills levels are key enablers of economic growth. Highly-skilled people are capable of creating jobs for themselves and others, while those with the appropriate skills’ sets can be absorbed into businesses when employment opportunities arise.
Understanding South Africa’s economic and labour market dynamics is a key impetus driving the CHIETA forward. We take pride in what we do, because, by facilitating skills’ development for the Chemical Industry, we are harnessing the abilities of our people and in turn, contribute to the country’s success.
To this end, during 2012/13 the Governing Board continued to provide the requisite leadership, guidance and oversight in the CHIETA’s strategic planning process. This has ensured that the training authority remains aligned to the country’s macro-economic policy and legislative frameworks, as well as the specific needs of the Chemical Sector.
Furthermore, the training authority’s nine economic sub-sectors also participated in the compilation of the CHIETA Sector Skills Plan, a crucial strategy that articulates the scarce and critical skills needs within the industry.
A testament to the CHIETA’s performance for 2012/13 is the fact that it met, and in some cases exceeded, 49 of the 50 performance targets that were agreed to with the Honourable Minister of Higher Education and Training as part of its Strategic Plan and Annual Performance Plan.
On behalf of my fellow Governing Board members, I wish to extend my congratulations to the management and staff of the training authority for achieving one of the best performance reports in the history of the organisation.
The CHIETA performance report demonstrates the success it has enjoyed in respect of learnerships, skills programmes, bursaries, artisans, FET partnerships, workplace experience, small business support, career guidance and projects in support of national priorities. These deliverables were executed with transformation, rural development, youth and a healthy balance between employed and unemployed learners as key factors.
CHIETA is fulfilling a crucial role
Nolitha FakudeChairperson
The catalyst for enhanced skills, economic growth and employability
5
Chairperson’s Report
During the reporting period, the Governing Board also continued to ensure that sound and effective corporate governance systems were in place and aligned to the approved CHIETA Constitution and best practice governance principles of King III and related legislation.
These efforts have been rewarded by the CHIETA once again obtaining an unqualified audit opinion. This achievement will serve to instil greater confidence among our stakeholders that the training authority is discharging its mandate in a transparent, compliant and disciplined manner.
As the Governing Board, we have high expectations that the training authority will build on the successes of the past year by creating even stronger partnerships with our stakeholders, to robustly facilitate the development and sustainability of a competent and highly-skilled workforce for the Chemical Sector.
In conclusion, I extend my sincere gratitude to the Honourable Minister of Higher Education and Training and the officials of the department, all our stakeholders and the CHIETA Governing Board for your support and guidance.
I would also like to convey a special word of appreciation to the management and staff for their hard work and commitment in delivering on the CHIETA Strategy. Your efforts are helping to raise skills’ levels in South Africa, which is a key enabler of economic growth.
nolitha FakudeChairperson
Annual Report 2012/13
6
Meet the Board
Nolitha FakudeCHAIRPERSON
Manene Samela Chemist Khumalo(Passed Away in 2012-13)
Merwe van Pletsen(Resigned during 2012-13)
Bertie Van Baalen
Jan Smit Jacqui Klaasen Brian Muir Gerhard Ceronie Mosehla Mampho
Dan Nkotsoe George Mnguni Dr Tshenge Demana Dr Mike Booth Ingrid Dimo
◊ Tshepo Naka (Appointed in 2012-13)
◊ Simon Mofokeng (Appointed in 2012-13)
The catalyst for enhanced skills, economic growth and employability
7
ACTING CEO’S REPORT
Annual Report 2012/13
8
Acting CEO’s Report
The 2012/13 period under review has been yet another phenomenal year at the CHIETA! Once again, with the support of our stakeholders namely organised labour, business and the Chemical Industry-related government departments, the CHIETA succeeded in delivering on its mandate. Our results for this reporting period reflect a sterling performance.The Chemical Sector as determined by skills-development legislation consists of nine sub-sectors, details of which can be found in the Research and Skills Planning Section. A substantial number of CHIETA companies operate within Gauteng (48%), followed by KZN (18%), the Western Cape (16%) and Eastern Cape (5%). A total of 75% of all levy-paying companies in the sector are classified as Micro (50%) or Small (25%). Companies in the CHIETA have a distinctly urban bias as the chemical companies are mainly located in the urban areas.
Credible Workforce Data
The financial year ending 31 March 2013 highlights include the ongoing improvement in the implementation of the CHIETA’s electronic Workplace Skills Plan (WSP)-Annual Training Report (ATR) platform, which requires the Chemical Industry companies to furnish their WSP-ATRS and plans, with credible and verifiable information of people working at the CHIETA companies. Detailed reports on the workforce at the participating companies by name, ID number, age, geographic location and job performed are mapped against an occupation and other important information that can be obtained directly from the system. The CHIETA’s first Occupational Profile Dictionary has been enabled through analyses using the new platform. Going forward, the CHIETA will be able to benchmark each worker’s actual skills with the desired skills required to perform the specific job/occupation. This will allow the CHIETA to plan for, and support the specific skills’ needs of our companies and the workforce within the Chemical Industry, This will ensure that Discretionary Grant funds are utilised to achieve maximum benefit.
The electronic WSP-ATR platform has also enabled and supported many more CHIETA companies, including the smaller ones, to submit their WSP-ATRs. Based on the 2011/12 WSP-ATR submissions, the CHIETA now has information for over 122 000 workers employed at participating companies. There has again been a significant increase in the number of WSP-ATR submissions – from 630 two years ago when the new electronic submission platform was designed – to 690 in the current reporting period. Having streamlined the process further, we are expecting as many as 710 WSP-ATRs by June 2013, that will be reported in the next financial year.
The CHIETA forges ahead
Ayesha Itzkin Acting Chief Executive Officer
The catalyst for enhanced skills, economic growth and employability
9
Acting CEO’s Report
National Artisan Skills Competition
In 2012/13, the CHIETA planned and began the implementation of its first National Artisan Skills Competition for three trades namely, Instrument Mechanician, Fitting and Electrical. The competition was open to all the SETAS and apprentices who met the entry criteria. Rounds one and two were held during this reporting period. From 319 participants who qualified to participate in the competition, 60 were women training to be artisans. By February 2013, 20 women qualified in the second round to proceed to round three which will be held from 14 to 16 May 2014. The competition was modelled on a world skills competition. The Honourable Minister Dr Blade Nzimande accepted CHIETA’s invitation to present prizes to the winners at the prize-giving gala dinner held on 17 May 2013.
Funding Efficiencies
The new grant funding regulations were promulgated in December 2012. The regulations were a result of discussions over the past three years between DHET stakeholders and relevant structures, to promote greater efficiencies for real and measureable training in terms of core occupational areas that need training support within each SETA, now known as pivotal training areas. The new regulations place greater emphasis on supporting skills needs within each economic sector for professional, institutional, vocational, occupational, technical and academic learning (PIVOTAL) interventions.For the CHIETA, as well as the other SETAs, the regulations have resulted in more funding becoming available in the Discretionary Grant basket as shown in projections in the table below. Consequently, the amount of funding disbursed for the submission of the WSP-ATR has been reduced from the previous 50% to 20% of levy contributed, with the remaining 30% now going to Discretionary Grants. This has resulted in approximately 250% more funds becoming available for pivotal skills training programmes. The non-pivotal skills that require training interventions will also continue to be funded.
The CHIETA has engaged its companies in numerous workshops since February 2013 to discuss the implications of these changes and their benefits. The companies appreciate the importance of proper planning and working closely with the CHIETA to ensure that training is implemented timeously. The CHIETA’s February 2013 implementation plan took cognisance of enhancing the required support structures to assist our companies during the start-up phase of implementing the new grant regulations. One of the key implications is that thorough and up-front skills development training planned at company level is communicated to the CHIETA, and completed by companies on time. Companies have supported the objective of efficiency regarding skills training, as per the new regulations.
COMPARISON OF PROJECTED FUNDING AVAILABLE TO CHIETA COMPANIES FOR 2013-14 BASED ON – OLD AND NEW GRANT REGULATIONS
FINANCIAL RESERVE OLD GRANT REGULATIONS NEW GRANT REGULATIONSMandatory Grants 50% - R259 463 354 20% - R103 705 338Discretionary Grants 20% - R103 705 338 49.5% - R256 868 712SETA Administration Fund plus 0.5% payable to QCto 10% - R51 892 669
10% - R51 892 6690.5% - R2 594 663
totAl R415 141 353 R415 141 353
The CHIETA has achieved a track record of an average of 91% disbursement of employer grants and project expenses since its inception. This has also helped to instil confidence in our stakeholders to work within the framework of the new grant regulations. It has now become even more important for SETAs to have access to credible labour market information to support the chemical industry’s training needs, maximally. CHIETA’s collaboration with DHET and other bodies on enhancing labour market research has progressed well during this reporting period, and our electronic WSP platform has assisted in enhancing our research efforts in this regard.
Annual Report 2012/13
10
CHIetA people
The CHIETA has been able to deliver on its mandate with the assistance of its staff and the guidance and support of the Governing Board. The appointment of additional staff members from the executive level down has contributed significantly to achieving our mandate and targets for the period under review. I commend the CHIETA Governing Board and all our stakeholders for their support and for walking the road with us.
new Developments
During this reporting period, the National Artisan Moderating Body in partnership with the Department of Higher Education and Training and selected SETAs started conceptualising a new efficient and effective model for apprentice training, known as the Dual System Artisan Training Programme. Partnering with another SETA to see if this model used in Germany and Switzerland should be piloted in South Africa is under consideration. The project entails working closely with Public, Further Education and Training Colleges (FETs) and companies to develop a training model that provides for two days at the workplace, two days at college and one day to complete assignments. Curricula, in partnership with the DHET, would be developed to support the training model. Other training industry/FET partnerships are also striving to emerge.
Audit opinion
I am delighted that the CHIETA has once again for the thirteenth consecutive year received an unqualified audit opinion from the Auditor-General of South Africa (AGSA). In support of this achievement the Auditor-General also pronounced that CHIETA’s organisational performance management and reporting against pre-determined targets is reliable in all material respects, and in accordance with the identified performance management and reporting frameworks required.This will sustain and further strengthen stakeholder confidence in CHIETA’s ability to excel and perform within a transparent and accountable framework, to the ultimate benefit of the Chemical Sector and socio-economic imperatives of South Africa. Performance-based reporting is new and the AGSA and management worked hard last year when performance-based auditing was included as part of the audit by the AGSA. Therefore, in the current reporting period, the CHIETA management had already mastered this reporting process.
In conclusion, I wish to thank our staff, Governing Board and Governance Committees, our stakeholders, the DHET, the Auditor-General and our Internal Audit service provider for their contribution to another successful year at the CHIETA. I am confident that the CHIETA will continue to be a critical force in the Chemical Sector, which makes an important contribution to the country’s objectives in developing skills. This underlines the importance of the role that the CHIETA plays in partnering with the Chemical Industry and public institutions to benefit the citizens of our country, especially the youth to obtain relevant training and attain the skills required to contribute positively to the South African economy.
Ayesha ItzkinActing Chief Executive Officer
Acting CEO’s Report
The catalyst for enhanced skills, economic growth and employability
11
RESEARCH AND SKIllS PlANNING
Annual Report 2012/13
12
Research and Skills Planning
CHIetA Research Framework
With the introduction of the National Skills Development Strategy (NSDS) III, greater emphasis is placed on research and analysis. Goal 1 of NSDS III specifically focuses on “Establishing a credible institutional mechanism for skills planning.” The CHIETA has developed a research framework and a research agenda and has strengthened its research function, particularly in relation to labour market research. Furthermore, CHIETA is strengthening partnerships to enhance research, delivery and impact.
The Sector Skills Plan
A big milestone in the year under review for the CHIETA was the preparation and submission of its five-year Sector Skills Plan (SSP) Update for the Chemical Sector for the period 2013 to 2018, to the Department of Higher Education and Training (DHET).
The Sector Skills Plan Update, endorsed by the CHIETA Board, was prepared in accordance with the National Skills Development Strategy (NSDS) III for the period 2011 to 2016. Feedback from DHET on previous SSP Updates was taken into account for the purposes of the SSP. In addition, the legislation, strategies and debates around skills development, including sector-specific and broader national imperatives related to the growth and development of the economy, were considered while the new Grant Regulations gazetted on 3 December 2012 were also factored into the SSP Update.
The crux of this SSP Update is to guide and inform skills-development initiatives in the Chemical Sector. The report is the result of not only a well-researched process, but also extensive stakeholder consultation, particularly via the CHIETA Chambers. The CHIETA stakeholders took ownership of this plan and are committed to working with the CHIETA in the next five years to address the skills-development priorities in the Chemical Sector, and to achieve the goals and objectives set out in the SSP. It will be revised and updated annually and aligned to government policies and growth plans as they become operational.
Critical planning puts the CHIETA on the road to success
Meryl Plasket
Executive Manager: Research and Skills Planning
The catalyst for enhanced skills, economic growth and employability
13
Research and Skills Planning
As part of its skills-development planning function, the CHIETA annually collects data from employers on occupations that they consider to be scarce skills occupations. The information on scarce skills was obtained by analysing the results set out in the Scarce-Skills Table of the WSPs-ATRs submitted for year 2011-2012, and discussed within the Chambers. Trade-related occupations constitute nearly 50% of scarce skills while professionals constitute nearly 40%. The scarce skills list was submitted to DHET by the deadline as is required annually, as well as being incorporated into the Skills Needs Section of the SSP.
Research projects for 2012/13
In addition to the secondary research undertaken as part of the SSP Update process, various research projects were undertaken.
The following research projects were completed in the 2012/2013 financial year:
◊ Strengthening Co-operatives (research and training).◊ HIV/Aids within the Chemical Sector and strategies to mitigate its impact (research and training).
The following research projects are in progress and will be completed in the next financial year:
◊ Identification of future skills needs of the Chemical Industries Sector with reference to the Green Economy.◊ Investigation of the levels of toxic chemicals in polluted industrial areas. (The project is with DUT, with 10 students
gaining practical research experience.)◊ Lifecycle approach to Integrated Waste-Management for Industrial and Chemical Packaging in South Africa.◊ Globally Harmonised System for the classification and labelling of chemicals (research and curriculum
development).
In pursuance of NSDS Goal 1: Establishing a credible institutional mechanism for skills planning and strengthening its labour market data, CHIETA undertook the following:
◊ Employer-perception sector survey mapped against NSDS III goals.◊ WSP/ATR Source Data Collection and Analysis Reports (WSP-ATR) were produced for all nine sub-sectors, as well
as a consolidated report for the Chemical Sector.◊ Occupation profiling resulting in the first CHIETA Occupational Dictionary (detailing information to the task level
and qualification), as well as submission to DHET on changes the sector proposed in updating the OFO Version 2012 to OFO Version 2013, to ensure the OFO represents the reality of occupations within the sector.
◊ Supply-side database conceptualisation and data collection.
CHIETA’s career guide will be informed by the Occupational Dictionary and the qualifications available. CHIETA will continue to support companies to improve the accuracy and quality of data for the next WSP-ATR and PIVOTAL report cycle. In addition, CHIETA plans to update the Occupational Dictionary, develop a qualification matrix against those occupations, establish and maintain the supply-side database for use by CHIETA companies, and roll-out the occupational and individual employee skills survey.
Annual Report 2012/13
14
Building Research Relationships and Partnerships
The first CHIETA Research Colloquium (the Colloquium hereafter) was held at the South West FET College in February 2012. The purpose of the Colloquium was to provide an opportunity and platform for Chemical Sector stakeholders to engage around skills-related research of relevance nationally and to the Chemical Sector specifically.
The invitees included CHIETA Board and Chambers (employer associations, trade unions, critical interest groups and government departments), CHIETA companies and stakeholders, quality councils (Quality Council for Trades and Occupations, Umalusi, and the Higher Education Quality Council), research councils such as Human Sciences Research Council (HSRC), public Higher Education and Training Institutions (HETs), Further Education and Training Colleges (FETs), government departments including the Department of Higher Education and Training (DHET), and other Sector Education and Training Authorities (SETAs).
The feedback received was very positive with requests for further engagements on issues such as green skills, consolidating partnerships, and learning programme issues. It is proposed to make the CHIETA Research Colloquium a regular event.There is great willingness from various institutions and industry to forge partnerships to support skills development. As a SETA, CHIETA is well-placed to facilitate and expand such partnerships. CHIETA engagements with various institutions on specific research and implementation areas will continue. A meeting for example, to discuss the supply-side database was held with various public FETs, UoTs and universities in March 2013.
In pursuance of the NSDS III Goal 1: Establishing a credible institutional mechanism for skills planning, the Department of Higher Education and Training (DHET) commissioned the Human Sciences Research Council (HSRC) to lead a national consortium supporting it in creating a strategic labour market intelligence system. The core research consortium consists of the HSRC, the Development Policy Research Unit at the University of Cape Town, and the Education Policy Unit at the University of the Witwatersrand. Other partners include public and private research institutes, universities and independent consultants. CHIETA has participated in the Labour Market Intelligence Programme (LMIP) forums and will continue to do so.
CHIETA has participated in various broader research events, such as the SAQA NQF Research Conference in March 2013, where CHIETA presented on two topics: CHIETA’s approach to partnerships particularly in relation to public FETs and HETs, and CHIETA’s green skills research project
Chambers
The five Chambers, made up of its nine sectors, namely: Petroleum and Base Chemicals, Fast-Moving Consumer Goods and Pharmaceuticals, Explosives and Fertilisers, Specialty Chemicals and Surface Coatings and Glass, have played a central role in skills planning in line with their constitutional mandate. Issues raised in the draft Chamber Skills Plans have been incorporated into the SSP Update. In the following year, the Chambers will develop and finalise sub-sector skills plans including flagship projects, some of which have already been launched. The CHIETA-SAPIA integrated education and training programme for the Petroleum Industry is an example of a flagship project.
The SSP Update and completed research reports are available on the CHIETA website: www.chieta.org.za
Research and Skills Planning
The catalyst for enhanced skills, economic growth and employability
15
lEARNING PROGRAMMES AND QuAlITy ASSuRANCE
Annual Report 2012/13
16
Learning Programmes and Quality Assurance
COMMITTED TO INNOVATION Stuurman Aphane
Quality Assurance Manager
SKILLING ARTISANS Tshidi Magonare
Apprenticeships Training Manager
The LP&QA Division (also known as the ETDQA Division) of the CHIETA is tasked with accrediting training providers, registering assessors and moderators, and performing quality assurance functions to ensure that credible and valid certificates are issued to competent learners on completing apprenticeships, learnerships and skills-programme training. This Division is headed by the Executive Manager Ayesha Itzkin.
As the skills-development landscape changes the Division continues to ensure that new developments are communicated and implemented at the CHIETA companies. An example is in the area of qualification design and registration. Previously, the Division was also responsible for the development of NQF qualifications through its now defunct Standards Generation Body. However, the QCTO (Quality Council for Trades and Occupations) is now the custodian of curriculum and qualifications design.
The QCTO is preparing to move full-steam ahead. As a transitory measure, the QCTO has advised all SETA-ETQAs that they need to continue to function as they did under the previous dispensation. SAQA will not register any new qualifications unless the QCTO process is followed, and the registration is recommended by the QCTO via the Development Quality Partners. The CHIETA has played the role of the DQP in collaboration with other SETAs, FET Colleges, other public institutions, and technical trades and occupations-based experts from companies to develop four new qualifications. They are Boilermaking/Fabrication, Surface Coatings, Laboratory Analyst and Welding. Two occupational qualifications were submitted to SAQA for registration. These qualifications are not SETA-specific however, there are areas of specialisation that are sector-specific. It is important for the CHIETA stakeholders to note that SAQA has registered all qualifications that are still fit-for-purpose for a further three years from 30 June 2012 to 30 June 2015, or until their teach-out period.
Designing occupationally-directed curricula and unit standards, as well the associated assessment specifications are overseen by the LP&QA Division. The QCTO has to date provided full support and guidance in this regard to the CHIETA’s development processes. The Division has two Training and Quality Assurance Units. The Apprentice Training
The catalyst for enhanced skills, economic growth and employability
17
lP&QA
Unit (ATU) is managed by Tshidi Magonare, who handles apprentice training and the ETQA (Education, Training, and Quality Assurance) Unit Manager, Stuurman Aphane, who concentrates on NQF- related training. Learner data and other relevant training-related data are captured by the Division staff who also issue certificates to competent learners. Both units participated and provided input in the CHIETA’s strategic planning and management of key performance areas, including reporting back to stakeholders and the relevant authorities on achievements.
The ATU supported employers offering apprenticeship training, as well as the CHIETA-accredited Decentralised Trade Testing Centres (DTTCs), and issued certificates to competent learners co-signed by the CHIETA and the Registrar. Artisan development was crucial to the achievement of the NSDS III Skills Accord of July 2011, and Government’s New Growth Path. A total of 51 providers, DTTCs and employers were supported, inspected and accredited or their scope extended, exceeding the annual target of 10 by far.
Successful Skills Competition
In 2012/13 the ATU was tasked with the implementation of the CHIETA’s inaugural Skills Competition. The final round of the competition took place in May 2013. The purpose of the competition is to increase awareness of the CHIETA’s apprenticeships, raise the standard of competency in the apprenticeship environment, and create a competitive spirit between apprentices. The competition prioritised the following trades: Electricians, Instrument Mechanicians and Fitters. The competition is modelled on the World Skills Competition to which the Chemical Sector plans to send competitors in the future.
The ATU planned and co-ordinated the first two rounds of the Skills Competition. This work was overseen and directed by the Executive Manager of the Division, Ms Ayesha Itzkin (who is also the Acting Chief Executive Officer), the ATU staff, the staff of the CHIETA’s Relationships Unit, the National Artisan Training Committee and the CHIETA’s Governing Board.
Of the 320 applicants who qualified to enter the competition, 60 were females. Twenty-seven finalists went through to the final round held in May 2013. Sponsorships and other types of support were secured from a number of CHIETA companies. The competition has proven to be a successful partnership between the CHIETA and its industry partners.
Overcoming challenges
In 2012/13 there was initially a lower than expected uptake of apprentices within the Chemical Sector. Financial incentives were reviewed and internal processes improved to increase efficiencies. The LP&QA Division focused on stakeholder forums and meetings to explore apprenticeship training challenges and proposed solutions. It also reported, and provided input into the national process regarding the implementation of the improved and applicable legislations. An area that still needs ongoing improvement by the ATU is the inspection of workplaces. However, the Unit is working to address this issue.
Monitoring the quality of training provision is a key function of the Division and it is task of both the ATU and the ETQA. In the NQF arena more learners were enrolled for learnerships than anticipated. For statistics refer to the Organisational Performance Report. The LP&QA Division’s task is to promote a culture of excellence in the development of skills and lifelong learning, and to ensure quality training in the workplace.
Annual Report 2012/13
18
Crucial to the Division is its role as a partner with other CHIETA Divisions to achieve the Sector Quarter Monitoring Report (SQMR) targets. Of particular importance is the bringing together of the ATU and the ETQA and streamlining their processes. This will further be strengthened after the new Learning Programme Regulations are promulgated. This closer relationship is needed since the mechanical engineering-related learnerships can culminate in successful learners being declared artisans after passing a trade test. Monitoring and auditing processes and the capturing of data will in the new financial year also be streamlined across these two Units and as well as other CHIETA Business Units.
Participation of previously disadvantaged learners in skills development continues to grow. In excess of 70% of the beneficiaries in learnerships ranging from artisan-related trades to specialist areas in diverse learnerships, including chemical operations, were black learners. The proportion of rural learners is steadily growing – a prerequisite of the National Government Agenda on rural development.
In collaboration with the stakeholders, including the CHIETA’s Chambers, the LP&QA Division will continue to position itself to be a Development and Quality Assessment Partner (DQP) to ensure that fit-for-purpose learning programmes are developed. It will also act as the Assessment Quality partner (AQP) when needed to conduct credible assessments.
Anticipated new projects
Planned new projects include upgrading the CHIETA MIS and introducing electronic records and management of the data system. This will alleviate filing space problems, devolve the uploading of selected documents to skills-development providers, and link grants disbursements to learning programmes. The National Artisan Moderating Body in partnership with the Department of Higher Education and Training and selected SETAs started conceptualising a new model for apprentice training known as the Dual System Artisan Training Programme (DSAP). In Sasolburg, Flavius Mareka FET College has started discussions with SASOL (other companies in the area will also be approached) to collaborate on training interventions. It is hoped that the College will offer the theoretical component of learning programmes and the companies the workplace component. Work-integrated training is another strong area of focus. In this regard the CHIETA needs greater cooperation from our companies. We are confident that going forward work-integrated learning will be support by all role players in skills-development within the Chemical Industry.
lP&QA
The catalyst for enhanced skills, economic growth and employability
19
GRANTS AND STRATEGIC PROJECTS
Annual Report 2012/13
20
Grants and Strategic Projects
Grant applications and disbursements exceed all projections
Thapelo MadibengExecutive Manager: Strategic Projects
Legislative context
The past 12 months at the Grants Management and Strategic Projects Division have been characterised by significant regulatory and policy skills development-related changes. On 3 December 2012, the Minister of Higher Education issued a Government Gazette Notice on the new SETA Grants Regulations. These regulations sought to define and contain administrative costs, and the excessive surplus and carry-over costs at the end of the financial year. The new regulations will ensure that there is funding for the QCTO and for CHIETA to prioritise the PIVOTAL, scarce and critical skills programmes in the occupational learning pathway, and limit the considerable spending of SETA grants on short courses and noncore programmes.
The regulations aim to improve the quality of labour market information collected by SETAs from employers, and the quality of the WSPs-ATRs. They also attempt to clarify terminology challenges in the Skills Development Act and related regulations. The terminology includes, but is not limited to, surplus versus commitments, levies paid by employers, administrative costs versus project-management costs, and work-integrated learning versus work experience.
The regulations also aim to change the balance between the private and public provision of skills-development programmes, and ensure that SETAs will allocate Discretionary Grants that prioritises the offering of skills-development programmes to address sector needs, through public education and training institutions.
To this end, the CHIETA Governing Board approved a new CHIETA Funding Policy on 28 January 2013, aligned to the new SETA grant regulations.
The CHIETA BBBEE/Work Transformation Programme ensures that discretionary grants are made available to the large and SME enterprises to support development of middle and senior black managers, including females in the Chemical Sector. The grants are directly linked to improvements in participation of BEE firms as well as enterprises in the sector that would like to improve their BBBEE credentials.
The catalyst for enhanced skills, economic growth and employability
21
Grants and Strategic Projects
The NAMB had issued a draft policy on the administration and disbursement of the artisan grants to participating employers. This draft policy proposed major changes to the administration and management of the apprenticeships or engineering/artisan learnerships grants, and seek to standardise artisan grant levels, allocation and disbursement mechanisms across the engineering-related SETAs that implement artisan programmes. The Government Gazette notice on the Trade Test Regulations were also issued by DHET to regulate nationally, both the trade tests and the trade tests fees. A gazette for the listed trades was also issued by DHET by OFO Code containing a list of occupations recognised as trades in the Republic, and for which Discretionary Grants could be funded or utilised by the SETAs. In terms of the management and administration of learning programmes, the DHET issued learning-programme regulations and prescribed new learning-programmes agreement and skills-programme agreement. It also prescribed timelines to administer and manage all SETA-funded learning programmes. These regulations are planned for promulgation in the financial year 2013 and 2014, and will have major implications for the CHIETA Grants Management Unit and Strategic Projects Unit, as well as all the CHIETA ETDQA Division and our stakeholders.
Grants-Management Overview
The Division is responsible for the total management of the Discretionary Grants and the Mandatory Grants as well as the CHIETA Regional Offices. Despite all these regulatory and policy changes, the Grants Management Unit had disbursed a total of R141 million from 1 April 2012 to 31 March 2013, exceeding the amount of the previous financial year by 85 percent. For the year under review, the Discretionary Grants policy, framework, internal controls, processes, procedures, funding guidelines and models of the Discretionary Grant allocation were reviewed in line with the new SETA grant regulations for 2013. The CHIETA launched the Discretionary Grants Funding Policy to address some of the critical areas within the Strategic Framework of its Business Imperatives, and to address some of the critical areas of the third National Skills Development Strategy (NSDS III).
The Discretionary Funding Windows (among other critical focus areas) addresses and emphasises strong partnerships between employers, public education institutions (FET Colleges, universities, universities of technology) and private training providers, towards the promotion of work-integrated learning (WIL). WIL is a form of learning that integrates academic learning with structured periods of work experience on the sub-programmes including internships, work experience, practical training (P1 & P2) and Employment Incentive Grants awarded to employers who offer employment to CHIETA funded graduates.
The Discretionary Grants will make it easier for more people to access training and skills development to address skills shortages, and improving productivity and performance in the economy.
The key functional areas involved directly with the organisational performance-management are the CHIETA Regional Offices situated in Gauteng, KwaZulu-Natal, the Western Cape and the Eastern Cape. Through these offices, the CHIETA ensured increased stakeholder support, increased monitoring and verification, and the roll-out of an integrated project- management framework with all the business units at Head Office.
In terms of the Mandatory Grants for the year under review, 677 companies including large, medium and small companies participated in the Mandatory Grants process by the deadline. In the year under review, 50 percent of the levies paid by the employers were given back to the participants in the form of Mandatory Grants subject to submission and approval of WSPs-ATR by the CHIETA. The Mandatory Grant expense increased to 22 percent from R188 million in the prior financial year, to R215 million in the year under review.
The Mandatory Grant participant levels have increased substantially as a result of CHIETA’s new online platform and exceeded the participation projections of the year under review. CHIETA adopted a WSP-ATR online submission source data system-approach through which companies completed their source data template, after which the system automatically generated a WSP-ATR for the company. This contributed to the success of the Mandatory Grants process.
Annual Report 2012/13
22
Grants and Strategic Projects
The Grant applications and disbursement of the CHIETA exceeded all projections for the 2012/2013 financial year. In the year under review, significant funding supported critical training interventions within the Chemical Sector.
In terms of the Discretionary Grants allocations process, the applications for Discretionary Grants were oversubscribed, and after the required evaluations according to the CHIETA criteria, R164 million in funding was approved by the Grants Committee. The nature of the initiatives increased, so did the number of registered learnerships and workplace experiences, scarce and critical skills, apprenticeships, partnerships with Public FETS, some of the higher education institutions, and rural development. Incentives were also provided to companies for workplace experience and employment creation. The development of further graduate programmes assisted graduates to enter the workplace and make them more employable. The unit also promoted the recognition of prior learning (RPL) and facilitation of strategic-research programmes in collaboration with the Research and Skills Planning Unit.
As at 31 March 2013, the total CHIETA commitment based on outstanding DG contractual obligations was R349 million. This included an allocation of R164 million during the year under review to skills’ promotion as outlined in CHIETA’s financial statements. The good news is that the CHIETA does not have large amounts of funding available as a result of our commitments.
The programmes by region supported by Discretionary Grants in the 2012-2013 financial year shown in the table below:
LEARNERS NUMBERS BY PROGRAMME
NUMBER OF LEARNERS RECOMMENDED BY REGIONGAUTENG
AnD CentRAl KZn/eC WC/nC totAl18.1 18.2 18.1 18.2 18.1 18.2 18.1 18.2
ABET 561 - 153 25 15 0 729 25 APP 57 251 38 151 44 180 139 582 BBBEE 84 2 102 - 38 7 224 9 Bursaries - - 6 5 9 62 15 67 Career Guidance - 100 - 1 125 0 1235 - 2 460
COOPS, NGOs, NLPEs, and NPOs/ NVC Support 90 - - - 0 0 90 - FET learnership 264 175 115 174 52 10 431 359 FLC 112 32 110 406 28 30 250 468 GETC Learnership 46 28 26 21 12 4 84 53 Graduate Development 15 97 - 2 0 523 15 622 HET Learnership 10 17 16 8 0 0 26 25 Internships 26 132 - 311 30 79 56 522 National Priorities 94 7 10 75 0 0 104 82 Research - - - - 0 0 - - RPL 164 54 6 10 0 15 170 79 SMME 1 32 - - 0 0 1 32 SP 941 56 1 615 20 214 0 2 770 76 Work Placement 18 97 - 18 0 29 18 144 Workplace Experience 26 188 - 50 0 21 26 259 totAl 2 509 1 268 2 197 2 401 442 2 195 5 148 5 864
The catalyst for enhanced skills, economic growth and employability
23
Grants and Strategic Projects
Grants allocation supporting rural development
The breakdown of the 2012-2013 Discretionary Grants supporting rural development by region is shown below:
Gauteng and Central R27 922 575.88KZN/Eastern Cape R974 500.00Western Cape R6 971 259.00total R35 868 334.88
CHIETA delivers on its Grant Mandate
While certain capacity constraints have been experienced by the organisation for the year under review, these did not impact on the ultimate delivery of CHIETA to its stakeholders, nor were the achievement of our strategic objectives and grant-related targets compromised.
Furthermore, the CHIETA Grants Committee has provided good oversight of the Discretionary and Mandatory Grants processes.
Strategic Projects Overview
It was a positive year for Strategic Projects, which are flagship organisational interventions that yield significant and sustainable impact on all the delivery areas of CHIETA.
Strategic projects were funded through Discretionary Grant monies and monitored continuously in terms of project and financial performance, and reported on quarterly to the Accounting Authority. Strategic Projects covered a range of functional areas with project owners across CHIETA business units assuming accountability for the deliverables on budget, on time and in line with the pre-determined performance standards defined.
Of further significance was the linkage of each Strategic Project to the various Goals, Outcomes and Outputs as defined in the NSDS III to ensure resource and organisational focus, and relevance to the skills’ development challenges and opportunities in the Strategic Framework.
projects
Regional Stakeholder Support
In terms of project deliverables, Regional Skills Forums were held in April and May 2012, on WSP-ATR/Mandatory Grant processes and in September and November 2012, to update stakeholders on the new artisan development, administration and grants-disbursement draft policy. The forums also updated stakeholders on the progress in the CHIETA Chamber mandate process and the SSP. In November 2012, sector stakeholders were updated on the new legislation framework of the National Skills Development Strategy III, learning programme regulations, Department of Trade and Industry regulations (Draft Revised BBBEE Codes of Good Practice), listed trade and gazette regulations, as well as artisan-development processes. RSFs were held in four regions: Gauteng, the Western Cape, KwaZulu-Natal and the Eastern Cape. They were attended by CHIETA’s levy-paying companies, accredited providers, labour organisations within the Chemical Sector, and CHIETA-linked public FETs and HETs.
Annual Report 2012/13
24
Grants and Strategic Projects
Trade Union Capacity-Building Programme
In support of the National Skills Accord to ensure increased stakeholder participation in skills development, the Grants Committee of the CHIETA has approved a budget of R4,000,000 towards Phase One of Trade Union Capacity-Building Programme (Skills Development within the Chemical Sector). Five unions were supported during the year under review, as per the table below:
trade union name MoA Deliverables Number of beneficiariesSACWU One joint workshop 150SOLIDARITY Three provincial workshops
Mpumalanga 34Western Cape 31Gauteng 14
CEPPWAWU Three workshops 250UASA* 1 joint workshop 60 (planned)GIWUSA* 2 workshops 100 planned
30 delegates* Capacity-building training is planned for quarter 1 in the 2013/2014 financial year.
In summary, a total of 479 shop stewards within the respective trade unions in the Chemical Sector have received the Phase One skills-development training as at 31 March 2013.
CHIetA Bursary project
The CHIETA Board approved a budget of R5,000,000 for bursaries for 2012-2013 towards supporting students to follow disciplines and careers in the Chemical Industry. The CHIETA placed advertisements in the national newspapers and received bursary applications from all nine provinces.
CHIETA bursary fields of study include:
◊ Analytical Chemistry ◊ Civil Engineering
◊ Biochemistry ◊ Operations Management
◊ Biomedical Technology ◊ Electrical Engineering
◊ Chemical Engineering ◊ Environmental Science
◊ Mechanical Engineering ◊ Industrial Engineering
◊ Polymer Technology ◊ Bachelor of Science in Engineering
The catalyst for enhanced skills, economic growth and employability
25
Grants and Strategic Projects
A total of 109 bursars have been supported by the CHIETA bursary project during the year under review as per enrolments:
Undergraduate Degree:
◊ Science: 36 Students◊ Engineering: 69 Students
Honours Degree: 2 Students
Masters Degree: 2 Students
CHIETA Voucher Scheme
There was a good uptake of the CHIETA Voucher Scheme by accredited providers and potential providers from all sectors, institutions and companies. Small and micro companies were encouraged to use the opportunity to participate in the scheme. Programmes covered included: SMME development, training of coaches and mentors, training of SDF, assessors, moderator and facilitator training to specified unit standards, assessor, moderator and facilitator training and constituent registration with CHIETA and technical skills-development for small companies within the Chemical Sector.
ISOE Projects
CHIETA has supported two Institutes of Sectoral Occupational Excellence (ISOEs) projects in the glass subsector and paint manufacturers subsector for the year under review. The ISOE for excellence and skills training in the glass subsector and the painting and surface-coating subsector has been established and will be launched in the new financial year. CHIETA is investigating ISOEs for the pharmaceutical, explosives/fertilisers and petrochemical subsectors.
In the petrochemical subsectors, CHIETA has developed a skills-development framework in partnership with the University of the Witwatersrand and SAPIA for the petrochemical sector. It is a CHIETA flagship project and is divided in three phases. Phase One: eight learners have registered with Wits in the MSc in petroleum engineering, a new qualification not previously available in South Africa. The project is the first of its kind in the country. Five learners are to be registered in the new financial year for a BSC in petroleum engineering (oil and gas) in partnership with Curtain University in Australia, subject to approval by the stakeholders involved in the project. Phases Two and Three will be rolled out in the new financial year.
CHIETA Offices in Public FET Colleges
The CHIETA Accounting Authority has approved funding to Ehlanzeni FET to the value of R1,800,000 to support the DHET FET Opening Project. The key deliverables of the CHIETA-Ehlanzeni FET project are the following:
◊ Ehlanzeni FET Learner Work Placement: The Workplace Task Team has been established and comprises FET college student support officers, education specialists and the CHIETA to place NCV learners in work-based experience relevant to their registered programmes. The placement is planned for the second quarter in the 2013/2014 financial year.
Annual Report 2012/13
26
◊ FET College Lecturer Capacitation: 40 lecturers trained so far through CHIETA funding, to be assessors, moderators and coaches in preparation for college accreditation on CHIETA programmes. Registration of lecturers as constituent assessors and moderators with different SETAs, primarily CHIETA is in progress, to be completed by end July 2013. CHIETA office soliciting support from other cluster SETAs and so far, 13 lecturers are to be contracted with companies for workplace exposure in the 2013/2014 financial year.
◊ Accreditation: The CHIETA has planned a pre-evaluation audit for the FET College engineering workshops to establish gaps for accreditation. This activity is planned for the 2013/2014 financial year.
Additional activities include training and support of the 20 co-operatives, 50 SMME development, internships and career awareness across the Ehlanzeni FET campuses.
The CHIETA has entered into the Memorandum of Agreement with the South African Graduate Development Association (SAGDA) to place 50 FET college students in work-integrated learning programmes. These learners will be placed with host companies in the 2013/2014 financial year.
The first office at Nelspruit campus was opened as per the DHET timeline of 1 October 2013. To support this office, an intern has been appointed from the campus. Five additional offices supported by interns will be opened on the other Ehlanzeni campuses in the next financial year. The offices serve as a one-stop shop for a SETA service within an FET college and are supported by participating SETAs.
Grants and Strategic Projects
The catalyst for enhanced skills, economic growth and employability
27
Western and Northern Cape Regional Office
The Western/Northern Cape Regional Office comprises a manager, skills advisor and administrator. The primary responsibility of the staff in the region is concerned with stakeholder-relationship management, and the delivery of CHIETA objectives as spelt out in the Business Plan.
Submission of Workplace Skills Plan and Annual Training Reports
The Western/Northern Cape Regional Office started off the year under review by assisting companies with their Mandatory Grant submissions which provided credible information as an input for the compilation of the CHIETA Sector Skills Plan.
Stakeholder Support
The Region held three Regional Skills Forums with its stakeholders regarding the WSP-ATR/Mandatory Grant process, Discretionary Grant application process and introduction to Chambers, SSP and the impending artisan and learning programmes regulations. The proactive approach resulted in awards being made that reflected the skills needs identified in the CHIETA Sector Skills Plan. A wide spectrum of stakeholders including CHIETA employers, labour, FET colleges, HETs and accredited providers. The increased confidence in the FET Sector provided an opportunity for the placement of many apprentices in the Chemical Industry.
In the 2012/2013 financial year, CHIETA stakeholder companies in the Western and Northern Cape received Discretionary Grants for the following key programmes: learnerships, apprenticeships, bursaries, skills programmes and adult basic education.
Companies were supported with work-integrated learning programmes in the form of P1/P2 to support unemployed learners registered in CHIETA disciplines to obtain the requisite work experience to attain their national diploma qualifications. Companies that employed learners on a permanently after completion of the internships were supported with Workplace Placement Grant for a year. This demonstrated an increased commitment from the regional stakeholder companies in pursuit of the National Skills Development imperatives for future economic growth.
ADDING VALUERoger Adriaanse
Acting Regional Manager: Western and Northern Cape Region
CHIETA REGIONAL OFFICES
Grants and Strategic Projects
Annual Report 2012/13
28
Grants and Strategic Projects
Use of public FET Colleges as skills-development providers
A major success story is a CHIETA-sponsored infrastructure project at Northlink FET College in Cape Town. The establishment of an instrumentation laboratory for the training of technicians is the first of its kind at an FET college in the Western Cape. The project was the result of a need identified at the Chevron Refinery in Cape Town. The laboratory will serve the petro-chemical refineries and the pharmaceutical sector in the Western Cape.
Rural Development Support
In the rural part of the Western Cape, artisan-development projects in Mossel Bay and George benefited both employed and unemployed learners from those communities. In Mossel Bay, PetroSA commenced training of 208 unemployed learners while Africa Skills Village in George commenced training 80 learners in the fitting, welding, electrical and boiler making trades. These learners are either on learnerships or apprenticeship programmes and should be eligible for trade testing in approximately two years.
The catalyst for enhanced skills, economic growth and employability
29
KZN and Eastern Cape Regional Office
Submission of Workplace Skills Plans and Annual Training Reports
The submission of WSP-ATRs from skills-development levy contributions in KwaZulu-Natal and the Eastern Cape has increased for the year under review.
The CHIETA web-based WSP-ATR submissions process provided important data for the purpose of research and analysis, and gave an indication of what the sector had achieved in terms of training and development. The data informs the Sector Skills Plans and provides scarce and critical skills required for the Chemical Sector.
Stakeholder Support
The region encouraged participation of CHIETA companies in the KZN/EC in Discretionary Grants in 2012/2013. The Regional Office developed a public-private partnership with the Durban Chemical Cluster and eThekwini Municipality in the development of SMMEs in the sector.
An ongoing project with the Durban University of Technology provided workplace experience for 50 students in the year under review. The Chemical Incubator in developing small chemical companies in Port Elizabeth, has also been supported with Discretionary Grants during the year under review.
A Chemical Technology Station has been established at Mangosuthu University of Technology (MUT) in Durban which is pioneering expertise in processing of chemical products for chemical engineering students for example, soap and detergent-making. CHIETA has awarded MUT a Discretionary Grant and students have been given workplace experience required to obtain their qualification. Students have also been exposed to real workplaces in the industry in the area. Their processes also encourage SMME development so that possible business start-ups become a reality.
The CHIETA also funded the training of shop stewards in the Chemical Sector in Occupational Health and Safety in the year under review. This project was in partnership with the University of KwaZulu-Natal and 26 shop stewards received training.
Grants and Strategic Projects
FOCUSING ON DELIVERY Rajen Naidoo
Manager: KwaZulu-Natal and Eastern Cape Region
CHIETA REGIONAL OFFICES
Annual Report 2012/13
30
The use of Public FET Colleges as skills-development programmes
Artisan Development through the use of public FET colleges remains a priority. Umfolozi FET College has been supported with Discretionary Grants to facilitate three-year practical artisan training for unemployed learners. The college has established partnerships with industry to provide the requisite apprenticeship workplace experience for learners to become qualified artisans.
Rural Development Support
The Regional Office has also implemented a rural-development project where 800 learners received additional lessons in maths and science subjects. The CHIETA partnered with Busisiwe Communications to implement a mathematics and science intervention in three Umgungundlovu Municipalities, namely uMsunduzi, Impendle and uMngeni supporting rural high schools. The project was a pilot exercise and has achieved a 29% overall improvement in mathematics and science pass rates as compared to the matric pass rate in these municipalities for the year 2011. The CHIETA firmly believe interventions like these can assist to improve matric pass rates.
Strategic Infrastructure Projects planned for the new year
There are major expansion plans for KwaZulu-Natal, one of them being the construction of the new Durban Dig-Out Port which will involve digging up the old airport and extending the current harbour. This will affect the Durban South Basin, our chemical hub in the manufacture, storage and distribution of chemical products. CHIETA plans to position itself in the new year so that the anticipated skills needs are identified and our sector can respond accordingly.
The construction of the Durban/Gauteng Chemical Pipeline also provides challenges in meeting the right skills needs at the Coega development, with its planned refinery by PetroSA. These developments will certainly have a huge impact on the Chemical Sector, and CHIETA will have to respond accordingly with appropriate skills development interventions in partnership with the Premier’s Office in the provinces.
Grants and Strategic Projects
The catalyst for enhanced skills, economic growth and employability
31
Gauteng and Central Office
The Gauteng and Central Regional Office played a crucial role in the operations of the CHIETA, as more than 50 percent of all the CHIETA levy-paying stakeholders in the country are situated here. In the reporting period, the office was responsible for a vast area that encompasses Gauteng, the Free State, North West, Mpumalanga and Limpopo provinces. All nine sub-sectors fall within this region namely base chemicals, explosives, fertilisers, glass, petroleum, pharmaceuticals, speciality chemicals, surface coatings and fast moving consumer goods.
Submission of Workplace Skills Plan and Annual Training Reports
The largest number of the WSP-ATR submissions to CHIETA came from companies in the Gauteng and the Central region. Critical to running an efficient service was ensuring that the WSP-ATR Online Submission Database was constantly updated with relevant and new information.
Stakeholder Support
The region provided stakeholders with the support required to access the Mandatory and Discretionary Grants, as well as verifying and monitoring ongoing projects. As part of providing stakeholder support, this office held three regional skills forums including a workshop at the beginning of 2013 to inform stakeholders about how to apply for their WSP-ATR/Mandatory Grants.
The Mandatory Grant cycle for 2011/2012 was completed successfully and plans were put in place to close old Discretionary Grant projects for the year under review.
The Region has awarded the largest number of Discretionary Grants to CHIETA Gauteng and Central companies. The programmes awarded are in line with the CHIETA Sector Skills Plan.
SUPPORTING CHIETA’S LARGEST REGIONBongani Mtshali
Acting Regional Manager: Gauteng and Central Office
CHIETA REGIONAL OFFICES
Grants and Strategic Projects
Annual Report 2012/13
32
Rural Development Support
CHIETA has signed a Memorandum of Agreement with the University of Limpopo to establish mobile laboratory equipment to support rural science schools in Limpopo with maths and science. These schools do not have the requisite science laboratory and capacity to assist learners to obtain good pass marks in maths and science to enter Chemical Sector disciplines. The project will be rolled out in the new year and will also include Teacher Development in collaboration with the University of Limpopo’s Department of Pharmacy. Furthermore, the Gauteng and Central Office supported new Venture Creation Training for Co-operatives around Welkom in the Free State.
Use of FET Colleges as skills-development programmes
The CHIETA signed a Memorandum of Agreement with the University of North West (Potchefstroom) to train 30 women occupying leadership and management positions at four public FETs in North West. The University registered 30 learners in the National Advanced Certificate in management. The learners will graduate in September 2014. The Orbit and Vuselela FET colleges are involved. CHIETA has opened an office at the Ehlanzeni FET College and will continue to open a further five offices in the new financial year.
Grants and Strategic Projects
The catalyst for enhanced skills, economic growth and employability
33
GOVERnAnCE And Risk
Annual Report 2012/13
34
Governance and Risk
Reaping the rewards of good governance
Trevor Channing Group Executive Governance and Risk
The past year has been significant for the organisation’s performance, and we have attained the goals we set for ourselves at the beginning of the financial year under review.
The unit oversaw six areas in the organisation, namely:
◊ Governance◊ Risk management◊ Organisational Performance◊ Information Technology◊ Stakeholder Relationships◊ Internal Audit and External Audit procedures in conjunction with the Finance Business Unit
Governance
The Governance and Risk Unit has strategic and functional oversight on governance and compliance frameworks across CHIETA Business Units, ensuring that we disperse on the CHIETA mandate within a compliant organisational culture. Within each business unit, each executive and manager is also tasked with the responsibility to ensures compliance in terms of the relevant Skills Development and related legislation, Government Policy frameworks inclusive of NSDS III, Treasury’s frameworks, the Public Finance Management Act (PFMA) and governance best practice captured and defined in King III.
A holistic view of governance and compliance was adopted by way of a CHIETA Legal and Compliance Register with stringent monitoring and evaluation interventions, to ensure a positive CHIETA Compliance profile that contributes significantly to an accountable and performance-driven delivery platform for all CHIETA stakeholders.
The CHIETA governance structures are organised in terms of the approved CHIETA constitution, which articulates how the Governing Board, Board Committees and the relevant stakeholder structures should function and relate to each other in discharging of their fiduciary duties in a responsible and sustainable manner.
The catalyst for enhanced skills, economic growth and employability
35
Governance and Risk
The CHIETA has a Governing Board comprising of 15 members appointed by the Minister of Higher Education and Training, and represents all the stakeholder constituencies in the Chemical Industry. Five key Board Committees supports the Governing Board in discharging their mandate namely, the Executive Committee (EXCO), Audit Committee, Grants Committee, Governance and Strategy Committee and the Finance and Remuneration Committee.
Although most CHIETA Governing Board members are nominated from their respective constituencies, all members functioned first and foremost as Board members who dispersed of their oversight function with care, independence and objectivity.
One of our strategic and functional advantages within CHIETA is the smooth and efficient manner in which the CHIETA Governance structures are managing their oversight function. Different and diverse strategic aspects were robustly discussed in the various committees and considered for recommendation and approval to the Governing Board, which allowed for timeous and enabling mandates for management to ensure excellent delivery to our stakeholders.
Risk Management
Organisational wide risk management has become a way of life for the CHIETA. The Governing Board conducted a strategic Risk-Management Workshop in October 2012, defining the top strategic organisational risks to CHIETA that can potentially hinder the effective and successful execution of our mandate. It was an extremely successful workshop, where strategic organisational risks were described in detail and linked to the CHIETA Strategic Plan and deliverables with inherent and residual risk scores and all important mitigating controls to ensure that all the defined risks are managed within the risk-appetite level set by the CHIETA Governing Board.
Simultaneously, a similar exercise was held with all the CHIETA business units articulating and defining their respective operational risks, with subsequent risk scores and mitigating controls and treatments.
Risk Management has been identified by the Governing Board as one of the priority areas in ensuring the disbursement of the CHIETA skills-development mandate for the Chemical Sector in a sustainable manner and in direct support of the broader socio-economic challenges facing our country. To this effect, the Board has also approved a new Risk- Management Policy to clarify rolls and accountability on all collective levels of the organisation, to ensure an effective and integrated risk-management framework for the organisation.
Information Technology
The Information Technology Unit has been, apart from normal functional and operational support to Business Units, also focussed strongly on a proper IT Governance Framework across all organisational processes to further position IT as an integral part of the strategic and performance planning processes of CHIETA.
From a governance perspective, the MANCO functioned as the IT Steering Committee as per the best practice framework articulated in KING III, to ensure that the CHIETA’s IT platform was continuously aligned and supportive to our Strategic Plan and performance deliverables. Specific emphasis was also placed on upgrading and stabilising our IT hardware and software platforms, the IT security protocols and IT business continuity.
Further enrichments are currently in process on the CHIETA IT platform to align to the new Public Sector IT Governance protocol where Phase One will be implemented and fully operational by March 2014, which will further strengthen the delivery and service standards of CHIETA towards all of its stakeholders.
Annual Report 2012/13
36
Organisational Performance
The CHIETA Governing Board recommended a five-year Strategic Plan and an Annual Performance Plan for 2012/13 to the Minister of Higher Education and Training and which was subsequently approved by the Honourable Minister for implementation. It articulated 50 predetermined performance targets across ten(10) strategic programmes in support of the NSDS III, government priority and policy frameworks, as well as stakeholder and industry requirements.
Both the Strategic Plan and Annual Performance Plan were aligned to the CHIETA’s Sector Skills Plan, which defines the critical and scarce skills requirements for the Chemical Sector. The detailed CHIETA Performance Report is captured on pages 43-60.
Organisational performance was excellent and the CHIETA has met or exceeded forty nine (49) of its fifty (50) predetermined targets which indicates clearly CHIETA’s commitment to delivery and impact on the Chemical Sector and National Skills Development agenda of South Africa.
CHIETA followed a balanced and integrated approach towards sector skills planning, strategy, governance and sustainability. Apart from the pure quantitative numbers in the performance report, focus was placed on developing quality scarce and critical skills sets for the Chemical Industry to support sector sustainability. Focus was also placed on green skills development for the environmental benefit of the industry and broader society. The relevant impact CHIETA’s skills development interventions had on National priorities and imperatives are also articulated further in the under-mentioned paragraph.
The CHIETA supported 7 332 learners in the year under review. Off those learners 3 454 (47 %) were employed and 3 878(53%) were unemployed learners; while 5 526 (75 percent) were from designated groups. An encouraging 1 867 (25 percent) were female learners; and 4 812 (66 percent) were youth (35 years and younger). A total of 114 (1.6 percent) were disabled learners and 2 715 (70 percent) of unemployed learners came from rural areas. The performance report and scores obtained by the CHIETA were also subjected extensively to Internal and External Audit processes to confirm accuracy and reliability of the performance information reported.
Internal and External Audit
The unit worked closely with Internal and External Auditors to continuously ensure an acceptable control and value- adding environment across CHIETA Business Units to inter alia, provide comfort and sustain stakeholder confidence that CHIETA is performing and delivering excellently within a transparent, accountable an compliant organisational environment.
Governance and Risk
The catalyst for enhanced skills, economic growth and employability
37
Governance and Risk
Stakeholder Relationships
In the year under review, stakeholder relationships focused on ensuring an integrated presentation of the CHIETA brand and sustained reputational management. This was supported through dedicated stakeholder events, media exposure and career exhibitions.
CHIETA focused on high visibility in the media, and specifically radio through to communicate the mandate and focal areas of CHIETA. It created awareness among stakeholders and learners on skills-development interventions and opportunities within the Chemical Sector.
The Stakeholder Relationships Unit supported and participated through career exhibitions with a strong rural bias in support of Strategic Programme 8, articulated in our Organisational Performance Report. We also exceeded our targets on learners exposed to CHIETA career exhibitions.
A dipstick stakeholder satisfaction survey was conducted that assisted CHIETA in implementing remedial and pro-active controls to enrich and sustain our service-delivery standards to CHIETA stakeholders.
The introduction of a CHIETA newsletter facilitated by the unit contributed significantly to the enhancement of transparent and open communication channels, within and outside of the CHIETA.
The enhancement and continuous improvement of the functionality of the CHIETA website will be a key focus area for reaching and attracting a diverse and wide stakeholder base in 2013/14.
As a stakeholder-driven organisation, the unit will maintain their momentum to ensure sustainable and supportive relationships with all CHIETA stakeholders going forward. The good and solid foundation that has been laid will serve as a springboard launching us into 2013/14.
Making sure everyone knows the CHIETA is the institute of choice for learners
Glory Nyathi Stakeholder Relationship Manager
Annual Report 2012/13
38
HuMAN RESOuRCES
The catalyst for enhanced skills, economic growth and employability
39
Human Resources
Cultivating a high-performance culture in the workplace
Joyce LotzHuman Resources Manager
The Human Resources Unit maintained their support as a value-adding business partner to CHIETA Business Units through the provision of the following HR services:
◊ Organisational design such as structural alignments and job profiling.◊ People-procurement interventions pertaining to recruitment, selection and induction processes.◊ Management of the Performance-Management Policy and Procedures.◊ Capacity-building interventions.◊ Interventions pertaining to service conditions’ management, human resources’ administration, labour-relations’
management and the implementation of employee well-being programmes.
Staff workshops were held where Business Units and staff members were given the opportunity to provide input on the CHIETA Strategic Plan and the performance contributions of each Business Unit towards delivery and sustained performance. The initiative had a positive impact on staff morale and resulted in a better understanding of the CHIETA’s strategic objectives.
Awareness initiatives were conducted, with particular focus on organisational risk-management and the CHIETA Fraud Prevention Plan. New staff were inducted and staff capacity-needs addressed according to development needs.
Staff development was promoted through study assistance offered by the CHIETA, with various employees furthering their studies.
CHIETA embarked on a change-management initiative. The objective was to optimise CHIETA business processes in support of the alignment of key compliance frameworks such as, inter alia, the newly promulgated SETA grant regulations. Change Management is ongoing with the expectation of further strengthening relationships within the organisation to ultimately benefit CHIETA stakeholders.
Employee well-being remains a key focus area for CHIETA. ICAS, the appointed wellness service provider, continued to provide a 24/7 confidential service to all CHIETA employees during the year under review. Further wellness interventions have been planned for the new financial year.
Annual Report 2012/13
40
Significant progress was made in the development of a new HR Policy Framework, aligned to the modern world of work and business requirements.
Interns
During the year under review, two interns were placed at CHIETA: one at Ehlanzeni Public FET College and the other at the CHIETA Head Office.
The intern programme has proved to be successful in that six out of 11 interns from the previous year have been employed by CHIETA.
Some HR initiatives planned for 2013/2014
◊ A fully-functional and integrated HR information system (HRIS).◊ Implementation of competency-based assessment tools for the purpose of recruitment and staff development.◊ Implementation of a revised performance-management system.◊ Implementation of a revised Personal Development Plan (PDP) process.◊ Various change-management projects.
CHIETA Staff Profile
Categories of Position
Afr
ican
Colo
ured
Indi
an
Whi
te
Dis
able
d
tota
l Fe
mal
es
Afr
ican
Colo
ured
Indi
an
Whi
te
Dis
able
d
tota
l Mal
es
Acting CEO 0 0 1 0 1 1 0 0 0 0 0 0Executive Managers 0 0 0 1 0 1 1 0 1 1 0 3Manager 3 0 0 1 0 4 2 0 2 0 0 4Regional Skills Advisors 1 0 1 0 0 2 4 1 1 1 0 7Specialists 1 0 0 1 0 2 4 1 0 0 0 5Accountant 0 0 0 0 0 0 1 0 0 0 0 1Practitioners 3 1 0 0 0 4 2 0 0 0 0 2Administators 8 1 0 0 0 9 1 0 0 0 0 1Assistant Administrators, Filing Clerk, Data Capturers 4 0 0 0 0 4 8 0 0 0 0 8Interns 2 0 0 0 0 2 0 0 0 0 0 0Office Attendants/ Cleaners 1 0 0 0 0 1 0 0 0 0 0 0Grand Totals per Category 23 2 2 3 1 30 23 2 4 2 0 31
Human Resources
The catalyst for enhanced skills, economic growth and employability
41
Organisational Structure
CHIETA GOVERNING BOARD
CHIeF eXeCutIVe oFFICeR
Chief Financial Officer
Executive: Learning
Programmes and Quality Assurance
Executive: Research and Skills Planning
Executive: Strategic Projects
Executive: Governance
and Risk
Human Resources
◊ Financial Management
◊ Supply-Chain Management
◊ External Audit
◊ Learning Programme Development and Implementation◊ Learnerships◊ Apprenticeships◊ Quality Assurance◊ Certification
◊ Data Management◊ Quality Management
System
◊ Research and Development
◊ Sector Skills Planning
◊ Chambers and Research and Skills Planning Committee
◊ Discretionary and Mandatory Grants
◊ Strategic Projects◊ Regional Offices
− Western and Northern Cape
− KZN and Eastern Cape
− Gauteng and Central Regions
◊ Governance and Compliance
◊ Risk Management◊ Internal Audit◊ IT ◊ Performance
reporting◊ Governing
Board and Board Committees
◊ Strategic Planning◊ Stakeholder
Relations
Annual Report 2012/13
42
CHIETA PERFORMANCE REPORT 2012/2013
The catalyst for enhanced skills, economic growth and employability
43
The CHIETA’S Organisational Performance
The National Skills Development Strategy III became operational on 1 April 2011. The CHIETA embraced this visionary strategy with an expanded focus of alleviating poverty through job creation and increased productivity utilising focused and relevant skills-development interventions within the Chemical Sector.
The CHIETA Strategic Plan and Annual Performance Plan 2012/13 defined and articulated the CHIETA’s response and impact on national imperatives and stakeholder needs. The CHIETA Sector Skills Plan is a stakeholder-driven intervention and together with National Government imperatives, forms the backbone and key strategic thrusts for the development of our strategic and organisational performance areas. It has specific reference to scarce and critical skills needs within the Chemical Sector, while contributing to a sustainable and global competitive Chemical Sector.
The CHIETA Strategic Plan and Annual Performance Plan have been conceptualised into 10 strategic programmes and relevant performance indicators, with 50 pre-determined targets. These measurable targets address relevant skills-development imperatives around the CHIETA SSP, occupationally-directed interventions, partnerships between employers, public education institutions such as FETs, universities of technology, universities and private training providers. It also addressed targets pertaining to grant disbursements, career guidance, workplace experience, adult education, and strategic projects in support of Government sector-priority, support provided to small business, NGOs, CBOs and CBCs and dedicated support on the performance targets of the Minister of HET with the President of South Africa.
The monitoring and evaluation of organisational performance is a dynamic process within the organisation, and each Business Unit performance owner is held accountable in terms of their relevant contribution to specific performance target(s) and agreed deliverables.
Strong oversight exists within the CHIETA Governance Structures with quarterly performance reports presented to the CHIETA Governing Board by the Governance and Strategy Board Committee for monitoring and evaluation, and pro-active remedial interventions where needed.
Of the fifty (50) pre-determined performance targets, 49 (98%) were met or exceeded.
Apart from the aforementioned, the following relevant characteristics from the CHIETA Performance Profile were evident, namely:
◊ A total of 7 332 learners participated in CHIETA Skills-Development Programmes and Interventions.◊ Of the learners who participated, 3 454 (47%) were employed while 3 878 (53%) were unemployed.◊ Of the learners who participated, 5 526 (75%) were from designated groups.◊ Of the learners who participated, 1 867 (25%) were female.◊ Of the learners who participated, 4 812 (66%) were from the youth.◊ CHIETA trained 114 disabled learners.◊ Of the unemployed learners who participated, 2 715 (70%) came from rural areas.
The detailed performance report per each performance indicator follows.
Annual Report 2012/13
44
CHiETA Organisational AlignmentN
SDSI
II, G
OV
ERN
MEN
T, S
TAKE
HO
LDER
AN
D L
EGIS
LATI
VE
CON
TEXT
AN
D G
OV
ERN
ING
BO
ARD
Prog
ram
me
1Re
sear
ch a
nd
Skill
s Pl
anni
ng
Prog
ram
me
2O
ccup
ation
ally
D
irect
ed
Prog
ram
mes
Prog
ram
me
3FE
T Co
llege
sPr
ogra
mm
e 4
Yout
h &
Adu
lt La
ngua
ge a
nd
Num
erac
y Sk
ills
Prog
ram
me
5W
orkp
lace
-Ba
sed
Skill
s D
evel
opm
ent
Prog
ram
me
6Su
ppor
t to
Smal
l Bu
sine
ss,
Co-o
ps, N
GO
s an
d CB
Os
Prog
ram
me
7Pu
blic
Sec
tor
Capa
city
Prog
ram
me
8Ca
reer
and
Vo
catio
nal
Gui
danc
e
Prog
ram
me
9M
ediu
m-T
erm
G
over
nmen
t Pr
iori
ties
Prog
ram
me
10Su
ppor
t to
Min
iste
r of
HET
’s
Serv
ice-
Leve
l A
gree
men
t with
Pr
esid
ent o
f So
uth
Afr
ica
◊ SS
P U
pdat
e◊
Sect
or
Rese
arch
Re
port
s th
roug
h Re
sear
ch
Part
ners
hips
◊ Em
ploy
ed /
un
empl
oyed
le
arne
rshi
ps,
inte
rnsh
ips,
sk
ills
prog
ram
mes
, bu
rsar
ies,
ar
tisan
s en
tere
d an
d ce
rtifie
d
◊ W
orkp
lace
- in
tegr
ated
le
arni
ng (W
IL)
◊ FE
T Co
llege
Pa
rtne
rshi
ps◊
CHIE
TA
pres
ence
at
FET
Colle
ges
◊ A
ET,
ABE
T, F
LC,
Brid
ging
and
fo
unda
tiona
l pr
ogra
mm
es
◊ M
G p
aid
to
larg
e, m
ediu
m
and
smal
l
com
pani
es
◊ Su
ppor
t to
co-
ops,
SM
MEs
, N
GO
s, C
BOs,
CB
Cs a
nd
wor
ker-
initi
ated
tr
aini
ng
◊ IS
OEs
id
entifi
ed a
nd
supp
orte
d
◊ Le
arne
rs
rece
ivin
g
care
er
guid
ance
on
car
eers
in
Che
mic
al
Sect
or
◊ D
edic
ated
st
rate
gic
proj
ects
in
supp
ort o
f G
over
nmen
t
impe
rativ
es
◊ Le
arne
rs
assi
sted
w
ith m
atri
c to
obt
ain
univ
ersi
ty
entr
ance
◊ In
crea
se
grad
uate
ou
tput
in
Engi
neer
ing
and
Nat
ural
Sc
ienc
es◊
Incr
ease
gr
adua
te
outp
ut
in H
ons,
M
aste
rs,
PHD
and
Pos
t D
octo
rate
s◊
Indu
stry
/
univ
ersi
ty
part
ners
hips
BASE
LIN
E TA
RGET
20
12/1
3: 2
BASE
LIN
E TA
RGET
20
12/1
3: 7
031
BASE
LIN
E TA
RGET
20
12/1
3: 4
69
BASE
LIN
E TA
RGET
20
12/1
3: 1
87
BASE
LIN
E TA
RGET
20
12/1
3: 2
110
BASE
LIN
E TA
RGET
20
12/1
3: 1
14
BASE
LIN
E TA
RGET
20
12/1
3: 2
BASE
LIN
E TA
RGET
20
12/1
3: 5
00
BASE
LIN
E TA
RGET
20
12/1
3: 4
BASE
LIN
E TA
RGET
20
12/1
3: 2
33
Busi
ness
uni
tsRe
sear
ch a
nd
Skill
s Pl
anni
ng,
Gra
nts,
Reg
ions
Busi
ness
uni
tsG
rant
s,
Regi
ons,
ETQ
A,
App
renti
cesh
ip,
Proj
ects
(Bur
sari
es)
Busi
ness
uni
tsG
rant
s, P
roje
cts,
Re
gion
s
Busi
ness
uni
tsG
rant
s, R
egio
nsBu
sine
ss u
nits
Gra
nts,
Reg
ions
Busi
ness
uni
tsG
rant
s, P
roje
cts,
Re
gion
s
Busi
ness
uni
tsG
rant
s, P
roje
cts,
Re
gion
s
Busi
ness
uni
tsG
rant
s, P
roje
cts,
Re
gion
s,
Rese
arch
and
Sk
ills
Plan
ning
Busi
ness
uni
tsG
rant
s, P
roje
cts,
Re
gion
s
Busi
ness
uni
tsPr
ojec
ts,
Gra
nts,
Reg
ions
, G
over
nanc
e,
Fina
nce,
HET
CEO
, Fin
ance
, Gov
erna
nce
cros
s-cu
tting
on
stra
tegi
c an
d fu
ncti
onal
leve
ls o
ver
all 1
0 St
rate
gic
Prog
ram
mes
CHIE
TA U
PDAT
ED S
SP 2
013
– 20
18
CHIE
TA S
TRAT
EGIC
PLA
N 2
011
– 20
16 A
ND
AN
NU
AL
PERF
ORM
AN
CE P
LAN
201
2/13
10 S
TRAT
EGIC
PRO
GRA
MM
ES A
ND
PER
FORM
AN
CE T
ARG
ETS
The catalyst for enhanced skills, economic growth and employability
45
The CHiETA’s Organisational Performance
PRO
GRA
MM
E 1:
RES
EARC
H A
ND
SKI
LLS
PLA
NN
ING
perf
orm
ance
Indi
cato
r20
12/1
3Ta
rget
Act
ual
Q1
Act
ual
Q2
Act
ual
Q3
Act
ual
Q4
tota
lVa
rian
ceSt
atus
2012
/13
Ach
ieve
dCo
mm
ents
1.1.
1SS
P U
pdat
e1
01
00
10
100%
Targ
et a
chie
ved.
Upd
ated
CH
IETA
SSP
sub
mitt
ed b
y de
adlin
e as
per
com
plia
nce
fram
ewor
k of
the
DH
ET.
1.1.
2N
umbe
r o
f Sec
tor
Rese
arch
repo
rts
thro
ugh
Rese
arch
Pa
rtne
rshi
ps
10
02
24
+340
0%Ta
rget
exc
eede
d. T
his
indi
cato
r w
as a
chie
ved
thro
ugh
our
Dis
creti
onar
y G
rant
s Fu
ndin
g Pr
ogra
mm
e th
at fo
cuse
d pr
imar
ily o
n th
e N
ation
al Im
pera
tives
of
the
NSD
S III
. In
term
s of
the
CHIE
TA D
iscr
etion
ary
Gra
nts
Fund
ing
Win
dow
rele
vant
re
sear
ch a
pplic
ation
s w
ere
rece
ived
, con
side
red
and
appr
oved
as
part
of t
he
evol
ving
rese
arch
age
nda
of
the
CHIE
TA.
1.1.
3Ba
selin
e2
01
22
5+3
250%
Base
line
targ
et e
xcee
ded.
KEY
Targ
et a
chie
ved
or e
xcee
ded
as p
er c
omm
ents
col
umn
No
targ
ets
set f
or 2
012/
13 a
s pe
r CH
IETA
Str
ateg
ic P
lan
and
APP
201
2/13
Subs
tanti
al m
ovem
ent o
n ac
tual
ach
ieve
men
t, b
ut m
argi
nally
beh
ind
annu
al ta
rget
◊ N
ote:
Tar
gets
ach
ieve
d an
d ex
ceed
ed a
re w
ithin
the
cont
ext o
f the
CH
IETA
Str
ateg
ic P
lan
and
pre-
dete
rmin
ed 2
012/
13 p
erfo
rman
ce
targ
ets
reco
mm
ende
d by
the
CHIE
TA A
ccou
nting
Aut
hori
ty a
nd a
ppro
ved
by th
e M
inis
ter
of H
ighe
r Ed
ucati
on a
nd T
rain
ing.
Annual Report 2012/13
46
PRO
GRA
MM
E 2:
OCC
UPA
TIO
NA
LLY-
DIR
ECTE
D P
ROG
RAM
ME
perf
orm
ance
Indi
cato
r20
12/1
3Ta
rget
Act
ual
Q1
Act
ual
Q2
Act
ual
Q3
Act
ual
Q4
tota
lVa
rian
ceSt
atus
2012
/13
Ach
ieve
dCo
mm
ents
2.1.
1Em
ploy
ed
lear
ners
hips
ent
ered
85
085
00
100%
Targ
et a
chie
ved.
Ente
red
prev
ious
fin
anci
al y
ear
420
Ente
red
curr
ent
finan
cial
yea
r12
824
037
25
2.1.
2Em
ploy
ed b
ursa
ries
en
tere
d50
00
050
500
100%
Targ
et a
chie
ved.
2.1.
3Em
ploy
ed in
tern
ship
s en
tere
d0
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
CHIE
TA m
embe
r co
mpa
nies
ge
nera
lly d
o no
t im
plem
ent
inte
rnsh
ip p
rogr
amm
es fo
r th
eir
empl
oyee
s an
d th
eref
ore
no ta
rget
was
set
. The
focu
s on
in
tern
ship
s is
targ
eted
tow
ards
un
empl
oyed
lear
ners
.2.
1.4
Empl
oyed
Ski
lls
Prog
ram
me
ente
red
1 05
01
050
010
0%Ta
rget
ach
ieve
d.
Ente
red
prev
ious
fin
anci
al y
ear
59
Ente
red
curr
ent
finan
cial
yea
r44
1549
883
The CHiETA’s Organisational Performance
KEY
Targ
et a
chie
ved
or e
xcee
ded
as p
er c
omm
ents
col
umn
No
targ
ets
set f
or 2
012/
13 a
s pe
r CH
IETA
Str
ateg
ic P
lan
and
APP
201
2/13
Subs
tanti
al m
ovem
ent o
n ac
tual
ach
ieve
men
t, b
ut m
argi
nally
beh
ind
annu
al ta
rget
◊ N
ote:
Tar
gets
ach
ieve
d an
d ex
ceed
ed a
re w
ithin
the
cont
ext o
f the
CH
IETA
Str
ateg
ic P
lan
and
pre-
dete
rmin
ed 2
012/
13 p
erfo
rman
ce
targ
ets
reco
mm
ende
d by
the
CHIE
TA A
ccou
nting
Aut
hori
ty a
nd a
ppro
ved
by th
e M
inis
ter
of H
ighe
r Ed
ucati
on a
nd T
rain
ing.
The catalyst for enhanced skills, economic growth and employability
47
perf
orm
ance
Indi
cato
r20
12/1
3Ta
rget
Act
ual
Q1
Act
ual
Q2
Act
ual
Q3
Act
ual
Q4
tota
lVa
rian
ceSt
atus
2012
/13
Ach
ieve
dCo
mm
ents
2.1.
5Em
ploy
ed le
arne
rshi
p ce
rtific
ated
425
183
193
3211
752
5+1
0012
3%Ta
rget
exc
eede
d. T
his
indi
cato
r w
as a
chie
ved
and
exce
eded
th
roug
h th
e D
iscr
etion
ary
Gra
nts
Fund
ing
Mod
el.
Mem
ber
com
pani
es re
spon
ded
very
favo
urab
ly to
this
Fun
ding
Pr
ogra
mm
e in
enh
anci
ng
prod
uctiv
ity a
nd p
erfo
rman
ce
with
in th
e w
orkp
lace
s of
the
Chem
ical
Indu
stri
es S
ecto
r. Th
e CH
IETA
cos
t- c
eilin
gs w
ere
revi
ewed
moti
vatin
g pr
ovid
ers
and
mem
ber
com
pani
es to
pa
rtici
pate
.2.
1.6
Empl
oyed
bur
sari
es
certi
ficat
ed
250
00
2525
010
0%Ta
rget
ach
ieve
d.
2.1.
7Em
ploy
ed in
tern
ship
ce
rtific
ated
0N
/AN
/AN
/AN
/AN
/AN
/AN
/AN
/AM
embe
r co
mpa
nies
do
not i
mpl
emen
t int
erns
hip
prog
ram
mes
for
thei
r em
ploy
ees
and
ther
efor
e no
ta
rget
was
set
. The
focu
s on
in
tern
ship
s ta
rget
s un
empl
oyed
le
arne
rs.
2.1.
8Em
ploy
ed S
kills
Pr
ogra
mm
e ce
rtific
ated
525
7315
259
204
551
+26
105%
Targ
et e
xcee
ded.
Mem
ber
com
pani
es w
ere
enco
urag
ed to
co
mpl
ete
the
impl
emen
tatio
n of
thei
r sk
ills
prog
ram
mes
re
sulti
ng in
a s
igni
fican
t in
crea
se o
f cer
tifica
tion
of
lear
ners
.
The CHiETA’s Organisational Performance
◊ N
ote:
Tar
gets
ach
ieve
d an
d ex
ceed
ed a
re w
ithin
the
cont
ext o
f the
CH
IETA
Str
ateg
ic P
lan
and
pre-
dete
rmin
ed 2
012/
13 p
erfo
rman
ce
targ
ets
reco
mm
ende
d by
the
CHIE
TA A
ccou
nting
Aut
hori
ty a
nd a
ppro
ved
by th
e M
inis
ter
of H
ighe
r Ed
ucati
on a
nd T
rain
ing.
PRO
GRA
MM
E 2:
OCC
UPA
TIO
NA
LLY-
DIR
ECTE
D P
ROG
RAM
ME
(con
tinu
ed)
Annual Report 2012/13
48
perf
orm
ance
Indi
cato
r20
12/1
3Ta
rget
Act
ual
Q1
Act
ual
Q2
Act
ual
Q3
Act
ual
Q4
tota
lVa
rian
ceSt
atus
2012
/13
Ach
ieve
dCo
mm
ents
2.1.
9U
nem
ploy
ed
lear
ners
hips
ent
ered
950
2 09
1+1
141
220%
Targ
et e
xcee
ded.
Thi
s in
dica
tor
was
ach
ieve
d an
d ex
ceed
ed
thro
ugh
the
Dis
creti
onar
y G
rant
s Fu
ndin
g M
odel
. The
CH
IETA
cos
t-ce
iling
s w
ere
revi
ewed
moti
vatin
g pr
ovid
ers
and
mem
ber
com
pani
es
to p
artic
ipat
e. T
his
was
a
prio
ritis
ed a
rea
focu
sing
on
the
unem
ploy
ed.
Ente
red
prev
ious
fin
anci
al y
ear
249
Ente
red
curr
ent
finan
cial
yea
r84
769
508
481
2.1.
10U
nem
ploy
ed
burs
arie
s en
tere
d 80
00
010
910
9+2
913
6%Ta
rget
exc
eede
d. A
str
ateg
ic
proj
ect s
et u
p by
the
CHIE
TA
enco
urag
ing
unem
ploy
ed
youn
g le
arne
rs p
ursu
ing
Chem
ical
-rel
ated
cou
rses
/
care
ers
with
in th
e Ch
emic
al
Sect
or.
In th
e re
cent
en
gage
men
ts w
ith th
e D
HET
, th
e SE
TAs
wer
e re
ques
ted,
gi
ven
thei
r aff
orda
bilit
y fr
amew
orks
, to
furt
her
stre
ngth
en in
vest
men
t in
this
ar
ea.
CHIE
TA s
ubse
quen
tly
resp
onde
d po
sitiv
ely
to th
is
requ
est n
ot o
nly
for
the
2012
/13
finan
cial
yea
r, bu
t als
o in
our
Ann
ual P
erfo
rman
ce
targ
et o
n th
is in
dica
tor
for
2013
/14.
The CHiETA’s Organisational Performance
KEY
Targ
et a
chie
ved
or e
xcee
ded
as p
er c
omm
ents
col
umn
No
targ
ets
set f
or 2
012/
13 a
s pe
r CH
IETA
Str
ateg
ic P
lan
and
APP
201
2/13
Subs
tanti
al m
ovem
ent o
n ac
tual
ach
ieve
men
t, b
ut m
argi
nally
beh
ind
annu
al ta
rget
◊ N
ote:
Tar
gets
ach
ieve
d an
d ex
ceed
ed a
re w
ithin
the
cont
ext o
f the
CH
IETA
Str
ateg
ic P
lan
and
pre-
dete
rmin
ed 2
012/
13 p
erfo
rman
ce
targ
ets
reco
mm
ende
d by
the
CHIE
TA A
ccou
nting
Aut
hori
ty a
nd a
ppro
ved
by th
e M
inis
ter
of H
ighe
r Ed
ucati
on a
nd T
rain
ing.
PRO
GRA
MM
E 2:
OCC
UPA
TIO
NA
LLY-
DIR
ECTE
D P
ROG
RAM
ME
(con
tinu
ed)
The catalyst for enhanced skills, economic growth and employability
49
perf
orm
ance
Indi
cato
r20
12/1
3Ta
rget
Act
ual
Q1
Act
ual
Q2
Act
ual
Q3
Act
ual
Q4
tota
lVa
rian
ceSt
atus
2012
/13
Ach
ieve
dCo
mm
ents
2.1.
11U
nem
ploy
ed
inte
rnsh
ips
ente
red
7518
012
5383
+811
1%Ta
rget
exc
eede
d. T
he
Dis
creti
onar
y G
rant
s Ro
ad
Show
s pr
iori
tised
this
are
a of
ski
lls d
evel
opm
ent a
nd
mem
ber
com
pani
es re
spon
ded
favo
urab
ly.
2.1.
12U
nem
ploy
ed s
kills
pr
ogra
mm
e en
tere
d28
028
3+3
101%
Targ
et e
xcee
ded.
A s
trat
egic
fo
cus-
driv
en p
roje
ct b
y th
e CH
IETA
with
in th
e Ch
emic
al
Sect
or a
ssis
ted
in a
chie
ving
an
d ex
ceed
ing
this
indi
cato
r by
pro
vidi
ng s
peci
fic w
ork-
rela
ted
and
skill
s pr
ogra
mm
es
for
unem
ploy
ed le
arne
rs
that
cou
ld p
rogr
ess
on th
e N
QF
and
prov
ide
for
mob
ility
in
to e
mpl
oym
ent.
The
CH
IETA
cos
t-ce
iling
s w
ere
revi
ewed
resu
lting
in g
reat
er
parti
cipa
tion
by s
take
hold
ers.
Th
e im
pact
of t
he re
cent
DG
cy
cle
also
ass
iste
d w
ith th
e ac
cele
ratio
n to
war
ds e
xcee
ding
th
is ta
rget
.
Ente
red
prev
ious
fin
anci
al y
ear
4
Ente
red
curr
ent
finan
cial
yea
r1
2835
215
2.1.
13U
nem
ploy
ed
lear
ners
hips
cer
tified
475
496
276
199
248
1 21
9+7
4425
7%Ta
rget
exc
eede
d. T
his
indi
cato
r w
as a
chie
ved
and
exce
eded
th
roug
h th
e D
iscr
etion
ary
Gra
nts
Fund
ing
Mod
el. T
he
CHIE
TA c
ost-
ceili
ngs
wer
e re
view
ed m
otiva
ting
prov
ider
s an
d m
embe
r co
mpa
nies
to
par
ticip
ate.
Thi
s w
as a
pr
iori
tised
are
a fo
cusi
ng o
n th
e un
empl
oyed
.
The CHiETA’s Organisational Performance
◊ N
ote:
Tar
gets
ach
ieve
d an
d ex
ceed
ed a
re w
ithin
the
cont
ext o
f the
CH
IETA
Str
ateg
ic P
lan
and
pre-
dete
rmin
ed 2
012/
13 p
erfo
rman
ce
targ
ets
reco
mm
ende
d by
the
CHIE
TA A
ccou
nting
Aut
hori
ty a
nd a
ppro
ved
by th
e M
inis
ter
of H
ighe
r Ed
ucati
on a
nd T
rain
ing.
PRO
GRA
MM
E 2:
OCC
UPA
TIO
NA
LLY-
DIR
ECTE
D P
ROG
RAM
ME
(con
tinu
ed)
Annual Report 2012/13
50
perf
orm
ance
Indi
cato
r20
12/1
3Ta
rget
Act
ual
Q1
Act
ual
Q2
Act
ual
Q3
Act
ual
Q4
tota
lVa
rian
ceSt
atus
2012
/13
Ach
ieve
dCo
mm
ents
2.1.
14U
nem
ploy
ed
burs
arie
s ce
rtifie
d40
56
033
44+4
110%
Targ
et e
xcee
ded.
A s
trat
egic
pr
ojec
t was
set
up
by
the
CHIE
TA e
ncou
ragi
ng
unem
ploy
ed y
oung
lear
ners
pu
rsui
ng C
hem
ical
-rel
ated
co
urse
s /
care
ers
with
in th
e Ch
emic
al S
ecto
r. In
the
rece
nt
enga
gem
ents
with
DH
ET, t
he
SETA
s w
ere
requ
este
d, g
iven
th
eir
affor
dabi
lity
fram
ewor
ks,
to fu
rthe
r st
reng
then
in
vest
men
t in
this
are
a. C
HIE
TA
subs
eque
ntly
resp
onde
d po
sitiv
ely
to th
is re
ques
t not
on
ly in
the
2012
/13
finan
cial
ye
ar b
ut a
lso
in o
ur A
nnua
l Pe
rfor
man
ce ta
rget
on
this
in
dica
tor
for
2013
/14.
2.1.
15
Une
mpl
oyed
in
tern
ship
s ce
rtifie
d38
00
047
47+9
124%
Targ
et e
xcee
ded.
Thi
s is
the
resu
lt of
the
prev
ious
yea
r’s
(201
1) p
artic
ipati
on in
this
pr
ogra
mm
e th
at le
d to
this
ac
hiev
emen
t.
The CHiETA’s Organisational PerformanceKE
YTa
rget
ach
ieve
d or
exc
eede
d as
per
com
men
ts c
olum
nN
o ta
rget
s se
t for
201
2/13
as
per
CHIE
TA S
trat
egic
Pla
n an
d A
PP 2
012/
13Su
bsta
ntial
mov
emen
t on
actu
al a
chie
vem
ent,
but
mar
gina
lly b
ehin
d an
nual
targ
et
◊ N
ote:
Tar
gets
ach
ieve
d an
d ex
ceed
ed a
re w
ithin
the
cont
ext o
f the
CH
IETA
Str
ateg
ic P
lan
and
pre-
dete
rmin
ed 2
012/
13 p
erfo
rman
ce
targ
ets
reco
mm
ende
d by
the
CHIE
TA A
ccou
nting
Aut
hori
ty a
nd a
ppro
ved
by th
e M
inis
ter
of H
ighe
r Ed
ucati
on a
nd T
rain
ing.
PRO
GRA
MM
E 2:
OCC
UPA
TIO
NA
LLY-
DIR
ECTE
D P
ROG
RAM
ME
(con
tinu
ed)
The catalyst for enhanced skills, economic growth and employability
51
perf
orm
ance
Indi
cato
r20
12/1
3Ta
rget
Act
ual
Q1
Act
ual
Q2
Act
ual
Q3
Act
ual
Q4
tota
lVa
rian
ceSt
atus
2012
/13
Ach
ieve
dCo
mm
ents
2.1.
16U
nem
ploy
ed s
kills
pr
ogra
mm
es c
ertifi
ed14
011
028
190
229
+89
164%
Targ
et e
xcee
ded.
The
pos
itive
re
spon
se fr
om m
embe
r co
mpa
nies
’ im
plem
enta
tion
and
proj
ect m
anag
emen
t w
ithin
the
time
fram
es o
f va
riou
s sk
ills
prog
ram
me
proj
ects
resu
lted
in p
ositi
ve
com
pleti
on a
nd c
ertifi
catio
n.
2.1.
17Em
ploy
ed a
rtisa
ns
ente
red
650
189
9411
725
065
00
100%
Targ
et a
chie
ved.
2.1.
18Em
ploy
ed a
rtisa
ns
certi
fied
163
3348
2858
167
+410
2%Ta
rget
exc
eede
d. T
he C
HIE
TA’S
im
plem
enta
tion
of A
rtisa
n D
evel
opm
ent h
as a
lway
s be
en
an a
rea
of p
rior
ity a
nd th
e co
nsis
tent
impl
emen
tatio
n of
th
is p
rogr
amm
e ha
s re
sulte
d in
th
is a
chie
vem
ent.
2.1.
19U
nem
ploy
ed a
rtisa
ns
ente
red
972
1 00
8+3
610
4%Ta
rget
exc
eede
d. T
he
Dis
creti
onar
y G
rant
s Fu
ndin
g M
odel
pri
oriti
sed
this
pr
ogra
mm
e an
d th
e co
st-
ceili
ngs’
revi
ew e
ncou
rage
d m
embe
r co
mpa
nies
to
parti
cipa
te.
Ente
red
prev
ious
fin
anci
al y
ear
320
Ente
red
curr
ent
finan
cial
yea
r15
024
811
317
7
2.1.
20U
nem
ploy
ed a
rtisa
ns
certi
fied
243
7683
2271
252
+910
4%Ta
rget
exc
eede
d. T
he
Dis
creti
onar
y G
rant
s Fu
ndin
g M
odel
pri
oriti
sed
this
pr
ogra
mm
e an
d th
e co
st-
ceili
ngs’
revi
ew e
ncou
rage
d m
embe
r co
mpa
nies
to
parti
cipa
te.
2.1.
21Ba
selin
e7
031
2 54
32
015
1 43
93
236
9 23
32
202
131%
Base
line
targ
et e
xcee
ded.
The CHiETA’s Organisational Performance
◊ N
ote:
Tar
gets
ach
ieve
d an
d ex
ceed
ed a
re w
ithin
the
cont
ext o
f the
CH
IETA
Str
ateg
ic P
lan
and
pre-
dete
rmin
ed 2
012/
13 p
erfo
rman
ce
targ
ets
reco
mm
ende
d by
the
CHIE
TA A
ccou
nting
Aut
hori
ty a
nd a
ppro
ved
by th
e M
inis
ter
of H
ighe
r Ed
ucati
on a
nd T
rain
ing.
PRO
GRA
MM
E 2:
OCC
UPA
TIO
NA
LLY-
DIR
ECTE
D P
ROG
RAM
ME
(con
tinu
ed)
Annual Report 2012/13
52
PRO
GRA
MM
E 3:
FET
CO
LLEG
E PR
OG
RAM
ME
perf
orm
ance
Indi
cato
r20
12/1
3Ta
rget
Act
ual
Q1
Act
ual
Q2
Act
ual
Q3
Act
ual
Q4
tota
lVa
rian
ceSt
atus
2012
/13
Ach
ieve
dCo
mm
ents
3.1.
1N
umbe
r of
wor
kpla
ce
expe
rien
tial l
earn
ing
ente
red
300
00
030
030
00
100%
Targ
et a
chie
ved.
3.1.
2N
umbe
r o
f w
orkp
lace
ex
peri
entia
l lea
rnin
g co
mpl
eted
150
00
714
315
00
100%
Targ
et a
chie
ved.
3.1.
3N
umbe
r of
FET
Co
llege
par
tner
ship
s18
00
811
19+1
106%
Targ
et e
xcee
ded.
The
CH
IETA
re
spon
ded
to a
Dis
creti
onar
y G
rant
app
licati
on in
par
tner
ship
w
ith a
Hig
her
Educ
ation
In
stitu
tion,
Pub
lic F
ET C
olle
ges
and
cam
puse
s re
sulte
d in
this
ac
hiev
emen
t.
3.1.
4
SETA
pre
senc
e at
FET
Co
llege
s1
01
00
10
100%
Targ
et a
chie
ved.
The
CH
IETA
is
the
host
SET
A in
Mpu
mal
anga
an
d ha
s op
ened
offi
ces
in
Ehla
nzen
i. Th
is w
as th
e m
anda
te o
f the
DH
ET.
3.1.
5Ba
selin
e46
90
115
454
470
+110
0%Ba
selin
e ta
rget
ach
ieve
d.
The CHiETA’s Organisational Performance
KEY
Targ
et a
chie
ved
or e
xcee
ded
as p
er c
omm
ents
col
umn
No
targ
ets
set f
or 2
012/
13 a
s pe
r CH
IETA
Str
ateg
ic P
lan
and
APP
201
2/13
Subs
tanti
al m
ovem
ent o
n ac
tual
ach
ieve
men
t, b
ut m
argi
nally
beh
ind
annu
al ta
rget
◊ N
ote:
Tar
gets
ach
ieve
d an
d ex
ceed
ed a
re w
ithin
the
cont
ext o
f the
CH
IETA
Str
ateg
ic P
lan
and
pre-
dete
rmin
ed 2
012/
13 p
erfo
rman
ce
targ
ets
reco
mm
ende
d by
the
CHIE
TA A
ccou
nting
Aut
hori
ty a
nd a
ppro
ved
by th
e M
inis
ter
of H
ighe
r Ed
ucati
on a
nd T
rain
ing.
The catalyst for enhanced skills, economic growth and employability
53
PRO
GRA
MM
E 4:
LO
W-L
EVEL
YO
UTH
AN
D A
DU
LT L
AN
GU
AG
E A
ND
NU
MER
ACY
SKI
LLS
perf
orm
ance
Indi
cato
r20
12/1
3Ta
rget
Act
ual
Q1
Act
ual
Q2
Act
ual
Q3
Act
ual
Q4
tota
lVa
rian
ceSt
atus
2012
/13
Ach
ieve
dCo
mm
ents
4.1.
1N
umbe
r of
lear
ners
in
ABE
T/A
ET e
nter
ed12
50
00
130
130
+510
4%Ta
rget
exc
eede
d. T
his
was
a
focu
s ar
ea in
the
CHIE
TA
Dis
creti
onar
y G
rant
s Fu
ndin
g M
odel
and
the
CHIE
TA S
trat
egic
Pl
an th
at re
sulte
d in
pos
itive
pa
rtici
patio
n an
d ac
hiev
emen
t fr
om C
HIE
TA s
take
hold
ers.
4.1.
2N
umbe
r of
lear
ners
in
ABE
T/A
ET c
ertifi
ed62
00
064
64+2
103%
Targ
et e
xcee
ded.
Thi
s w
as
a fo
cus
area
in th
e CH
IETA
D
iscr
etion
ary
Gra
nts
Fund
ing
Mod
el a
nd th
e CH
IETA
Str
ateg
ic
Plan
that
resu
lted
in p
ositi
ve
parti
cipa
tion
and
achi
evem
ent
from
CH
IETA
sta
keho
lder
s.4.
1.3
Base
line
187
00
019
419
4+7
104%
Base
line
targ
et e
xcee
ded.
The CHiETA’s Organisational Performance
◊ N
ote:
Tar
gets
ach
ieve
d an
d ex
ceed
ed a
re w
ithin
the
cont
ext o
f the
CH
IETA
Str
ateg
ic P
lan
and
pre-
dete
rmin
ed 2
012/
13 p
erfo
rman
ce
targ
ets
reco
mm
ende
d by
the
CHIE
TA A
ccou
nting
Aut
hori
ty a
nd a
ppro
ved
by th
e M
inis
ter
of H
ighe
r Ed
ucati
on a
nd T
rain
ing.
Annual Report 2012/13
54
PRO
GRA
MM
E 5:
WO
RKPL
ACE
-BA
SED
SKI
LLS
DEV
ELO
PMEN
T
perf
orm
ance
Indi
cato
r20
12/1
3Ta
rget
Act
ual
Q1
Act
ual
Q2
Act
ual
Q3
Act
ual
Q4
tota
lVa
rian
ceSt
atus
2012
/13
Ach
ieve
dCo
mm
ents
5.1.
1
Num
ber
of le
arne
rs
ente
red
wor
kpla
ce-
base
d sk
ills
deve
lopm
ent
1 15
00
365
362
387
1 11
4-3
697
%Th
is in
dica
tor
was
fund
ed
thro
ugh
the
Dis
creti
onar
y G
rant
s Fu
ndin
g M
odel
in
whi
ch m
embe
r co
mpa
nies
pa
rtici
pate
d.
5.1.
2
Num
ber
of
lear
ners
com
plet
ed
wor
kpla
ce-b
ased
sk
ills
deve
lopm
ent
575
168
150
187
167
672
+97
117%
This
indi
cato
r w
as e
xcee
ded
thro
ugh
the
Dis
creti
onar
y G
rant
s Fu
ndin
g M
odel
in
whi
ch m
embe
r co
mpa
nies
pa
rtici
pate
d.5.
1.3
Man
dato
ry G
rant
s pa
id to
larg
e fir
ms
101
08
8615
109
+810
8%Th
e CH
IETA
em
bark
ed o
n ex
tens
ive
regi
onal
ski
lls fo
rum
s,
road
sho
ws
and
natio
nal
inte
rven
tions
to e
ncou
rage
m
embe
r co
mpa
nies
to
parti
cipa
te. T
he o
nlin
e pr
oces
s of
the
subm
issi
on o
f WSP
s an
d AT
Rs e
ncou
rage
d m
embe
r co
mpa
nies
to p
artic
ipat
e an
d yi
elde
d po
sitiv
e re
sults
.5.
1.4
Man
dato
ry G
rant
s pa
id to
med
ium
firm
s84
010
103
1512
8+4
415
2%Th
e CH
IETA
em
bark
ed o
n ex
tens
ive
regi
onal
ski
lls fo
rum
s,
road
sho
ws
and
natio
nal
inte
rven
tions
to e
ncou
rage
m
embe
r co
mpa
nies
to
parti
cipa
te. T
he o
nlin
e pr
oces
s of
the
subm
issi
on o
f WSP
s an
d AT
Rs e
ncou
rage
d m
embe
r co
mpa
nies
to p
artic
ipat
e an
d yi
elde
d po
sitiv
e re
sults
.
The CHiETA’s Organisational Performance
KEY
Targ
et a
chie
ved
or e
xcee
ded
as p
er c
omm
ents
col
umn
No
targ
ets
set f
or 2
012/
13 a
s pe
r CH
IETA
Str
ateg
ic P
lan
and
APP
201
2/13
Subs
tanti
al m
ovem
ent o
n ac
tual
ach
ieve
men
t, b
ut m
argi
nally
beh
ind
annu
al ta
rget
◊ N
ote:
Tar
gets
ach
ieve
d an
d ex
ceed
ed a
re w
ithin
the
cont
ext o
f the
CH
IETA
Str
ateg
ic P
lan
and
pre-
dete
rmin
ed 2
012/
13 p
erfo
rman
ce
targ
ets
reco
mm
ende
d by
the
CHIE
TA A
ccou
nting
Aut
hori
ty a
nd a
ppro
ved
by th
e M
inis
ter
of H
ighe
r Ed
ucati
on a
nd T
rain
ing.
The catalyst for enhanced skills, economic growth and employability
55
perf
orm
ance
Indi
cato
r20
12/1
3Ta
rget
Act
ual
Q1
Act
ual
Q2
Act
ual
Q3
Act
ual
Q4
tota
lVa
rian
ceSt
atus
2012
/13
Ach
ieve
dCo
mm
ents
5.1.
5M
anda
tory
Gra
nts
paid
to s
mal
l firm
s20
00
2022
951
300
+100
150%
The
CHIE
TA e
mba
rked
on
exte
nsiv
e re
gion
al s
kills
foru
ms,
ro
ad s
how
s an
d na
tiona
l in
terv
entio
ns to
enc
oura
ge
mem
ber
com
pani
es to
pa
rtici
pate
. The
onl
ine
proc
ess
of th
e su
bmis
sion
of W
SPs
and
ATRs
enc
oura
ged
mem
ber
com
pani
es to
par
ticip
ate
and
yiel
ded
posi
tive
resu
lts.
5.1.
6Ba
selin
e2
110
445
338
955
582
2 32
0+2
1011
0%Ba
selin
e ta
rget
exc
eede
d.
The CHiETA’s Organisational Performance
PRO
GRA
MM
E 5:
WO
RKPL
ACE
-BA
SED
SKI
LLS
DEV
ELO
PMEN
T (c
onti
nued
)
◊ N
ote:
Tar
gets
ach
ieve
d an
d ex
ceed
ed a
re w
ithin
the
cont
ext o
f the
CH
IETA
Str
ateg
ic P
lan
and
pre-
dete
rmin
ed 2
012/
13 p
erfo
rman
ce
targ
ets
reco
mm
ende
d by
the
CHIE
TA A
ccou
nting
Aut
hori
ty a
nd a
ppro
ved
by th
e M
inis
ter
of H
ighe
r Ed
ucati
on a
nd T
rain
ing.
Annual Report 2012/13
56
PRO
GRA
MM
E 6:
SU
PPO
RT T
O C
O-O
PS, S
MA
LL E
NTE
RPRI
SES,
NG
Os,
CBO
s, C
BCs
AN
D W
ORK
ER-IN
ITIA
TED
/
COM
MU
NIT
Y TR
AIN
ING
INIT
IATI
VES
perf
orm
ance
Indi
cato
r20
12/1
3Ta
rget
Act
ual
Q1
Act
ual
Q2
Act
ual
Q3
Act
ual
Q4
tota
lVa
rian
ceSt
atus
2012
/13
Ach
ieve
dCo
mm
ents
6.1.
1N
umbe
r of
co
-ops
sup
port
ed25
00
890
89+6
435
6%Ta
rget
exc
eede
d. T
his
was
a
prio
ritis
ed R
ural
Fun
ding
Mod
el
that
enc
oura
ged
co-o
ps to
pa
rtici
pate
. Thi
s pr
ogra
mm
e w
as a
lso
impl
emen
ted
with
in
the
fram
ewor
k of
the
actu
al
outc
omes
of o
ne o
f the
NSD
S III
st
rate
gic
goal
s.
6.1.
2N
umbe
r o
f sm
all
busi
ness
sup
port
ed80
00
870
87+7
109%
Targ
et e
xcee
ded.
The
D
iscr
etion
ary
Gra
nts
Fund
ing
Mod
el e
ncou
rage
d es
peci
ally
sm
all b
usin
esse
s to
par
ticip
ate
resu
lting
in e
xcee
ding
the
targ
et.
6.1.
3\4
\5N
umbe
r of
NG
Os,
CB
Os
and
CBCs
su
ppor
ted
90
042
042
+33
467%
Targ
et e
xcee
ded.
The
D
iscr
etion
ary
Gra
nts
Fund
ing
Mod
el e
ncou
rage
d pa
rtici
patio
n in
this
are
a re
sulti
ng in
exc
eedi
ng th
e ta
rget
.6.
1.6
Base
line
114
00
218
021
8+1
0419
1%Ba
selin
e ta
rget
exc
eede
d.
The CHiETA’s Organisational PerformanceKE
YTa
rget
ach
ieve
d or
exc
eede
d as
per
com
men
ts c
olum
nN
o ta
rget
s se
t for
201
2/13
as
per
CHIE
TA S
trat
egic
Pla
n an
d A
PP 2
012/
13Su
bsta
ntial
mov
emen
t on
actu
al a
chie
vem
ent,
but
mar
gina
lly b
ehin
d an
nual
targ
et
◊ N
ote:
Tar
gets
ach
ieve
d an
d ex
ceed
ed a
re w
ithin
the
cont
ext o
f the
CH
IETA
Str
ateg
ic P
lan
and
pre-
dete
rmin
ed 2
012/
13 p
erfo
rman
ce
targ
ets
reco
mm
ende
d by
the
CHIE
TA A
ccou
nting
Aut
hori
ty a
nd a
ppro
ved
by th
e M
inis
ter
of H
ighe
r Ed
ucati
on a
nd T
rain
ing.
The catalyst for enhanced skills, economic growth and employability
57
The CHiETA’s Organisational PerformancePR
OG
RAM
ME
7: A
DM
INIS
TRAT
ION
AN
D P
UBL
IC S
ECTO
R CA
PACI
TY
perf
orm
ance
Indi
cato
r20
12/1
3Ta
rget
Act
ual
Q1
Act
ual
Q2
Act
ual
Q3
Act
ual
Q4
tota
lVa
rian
ceSt
atus
2012
/13
Ach
ieve
dCo
mm
ents
7.1.
1N
umbe
r o
f ISO
Es
iden
tified
and
su
ppor
ted
20
20
02
010
0%Ta
rget
ach
ieve
d.
7.1.
2Ba
selin
e2
02
00
20
100%
Base
line
targ
et a
chie
ved.
PRO
GRA
M 8
: CA
REER
AN
D V
OCA
TIO
NA
L G
UID
AN
CE
perf
orm
ance
Indi
cato
r20
12/1
3Ta
rget
Act
ual
Q1
Act
ual
Q2
Act
ual
Q3
Act
ual
Q4
tota
lVa
rian
ceSt
atus
2012
/13
Ach
ieve
dCo
mm
ents
8.1.
1N
umbe
r of
le
arne
rs
rece
ivin
g ca
reer
gu
idan
ce
500
00
832
083
2+3
3216
6%Ta
rget
exc
eede
d. T
his
was
als
o on
e of
the
pri
oriti
sed
fund
ing
area
s w
ithin
the
Dis
creti
onar
y G
rant
s Fu
ndin
g Pr
ogra
mm
e an
d sp
ecifi
c att
entio
n w
as g
iven
to
Mat
hs a
nd S
cien
ce C
aree
r G
uida
nce
Prog
ram
mes
w
ith
posi
tive
upta
ke
and
feed
back
fr
om s
take
hold
ers.
8.1.
3Ba
selin
e50
00
083
20
832
+332
166%
Base
line
targ
et e
xcee
ded.
◊ N
ote:
Tar
gets
ach
ieve
d an
d ex
ceed
ed a
re w
ithin
the
cont
ext o
f the
CH
IETA
Str
ateg
ic P
lan
and
pre-
dete
rmin
ed 2
012/
13 p
erfo
rman
ce
targ
ets
reco
mm
ende
d by
the
CHIE
TA A
ccou
nting
Aut
hori
ty a
nd a
ppro
ved
by th
e M
inis
ter
of H
ighe
r Ed
ucati
on a
nd T
rain
ing.
Annual Report 2012/13
58
PRO
GRA
MM
E 9:
MED
IUM
-TER
M S
TRAT
EGIC
PRI
ORI
TIES
perf
orm
ance
Indi
cato
r20
12/1
3Ta
rget
Act
ual
Q1
Act
ual
Q2
Act
ual
Q3
Act
ual
Q4
tota
lVa
rian
ceSt
atus
2012
/13
Ach
ieve
dCo
mm
ents
9.1.
1N
umbe
r of
pro
ject
s in
sup
port
of
Gov
ernm
ent’s
m
ediu
m-t
erm
pr
iori
ties
40
30
36
+215
0%Ta
rget
exc
eede
d. T
his
was
al
so a
pri
oriti
sed
fund
ing
prog
ram
me
thro
ugh
the
Dis
creti
onar
y G
rant
s th
at
enco
urag
ed a
nd re
sulte
d in
m
any
mem
ber
com
pani
es
and
prov
ider
s pa
rtici
patin
g po
sitiv
ely
in th
is in
terv
entio
n.9.
1.2
Base
line
40
30
36
+215
0%Ba
selin
e ta
rget
exc
eede
d.
PRO
GRA
MM
E 10
: MIN
ISTE
R O
F H
ET’S
SER
VIC
E-LE
VEL
AG
REEM
ENT
WIT
H P
RESI
DEN
T SA
perf
orm
ance
Indi
cato
r20
12/1
3Ta
rget
Act
ual
Q1
Act
ual
Q2
Act
ual
Q3
Act
ual
Q4
tota
lVa
rian
ceSt
atus
2012
/13
Ach
ieve
dCo
mm
ents
10.1
.1N
umbe
r of
lear
ners
as
sist
ed w
ith m
atri
c to
obt
ain
univ
ersi
ty
entr
ance
(RPL
)
500
00
100
100
+50
200%
Targ
et e
xcee
ded.
Thi
s pr
ogra
mm
e w
as p
rior
itise
d th
roug
h th
e D
iscr
etion
ary
Gra
nts
Fund
ing
Mod
el in
20
12/1
3 an
d en
cour
aged
m
embe
r co
mpa
nies
to
parti
cipa
te.
The CHiETA’s Organisational Performance
KEY
Targ
et a
chie
ved
or e
xcee
ded
as p
er c
omm
ents
col
umn
No
targ
ets
set f
or 2
012/
13 a
s pe
r CH
IETA
Str
ateg
ic P
lan
and
APP
201
2/13
Subs
tanti
al m
ovem
ent o
n ac
tual
ach
ieve
men
t, b
ut m
argi
nally
beh
ind
annu
al ta
rget
◊ N
ote:
Tar
gets
ach
ieve
d an
d ex
ceed
ed a
re w
ithin
the
cont
ext o
f the
CH
IETA
Str
ateg
ic P
lan
and
pre-
dete
rmin
ed 2
012/
13 p
erfo
rman
ce
targ
ets
reco
mm
ende
d by
the
CHIE
TA A
ccou
nting
Aut
hori
ty a
nd a
ppro
ved
by th
e M
inis
ter
of H
ighe
r Ed
ucati
on a
nd T
rain
ing.
The catalyst for enhanced skills, economic growth and employability
59
perf
orm
ance
Indi
cato
r20
12/1
3Ta
rget
Act
ual
Q1
Act
ual
Q2
Act
ual
Q3
Act
ual
Q4
tota
lVa
rian
ceSt
atus
2012
/13
Ach
ieve
dCo
mm
ents
10.1
.2In
crea
se g
radu
ate
outp
ut in
Eng
inee
ring
Sc
ienc
es
500
00
8282
+32
164%
Targ
et e
xcee
ded.
Thi
s pr
ogra
mm
e w
as p
rior
itise
d th
roug
h th
e D
iscr
etion
ary
Gra
nts
Fund
ing
Mod
el in
20
12/1
3 an
d en
cour
aged
m
embe
r co
mpa
nies
to
parti
cipa
te. I
t was
als
o su
ppor
ted
as a
Str
ateg
ic
Proj
ect s
uppo
rting
une
mpl
oyed
le
arne
rs.
10.1
.3In
crea
se g
radu
ate
outp
ut in
Nat
ural
Sc
ienc
es
500
00
5050
010
0%Ta
rget
ach
ieve
d.
10.1
.4In
crea
se g
radu
ate
outp
ut in
Tea
cher
Ed
ucati
on
500
00
5050
010
0%Ta
rget
ach
ieve
d.
10.1
.5In
crea
se o
utpu
t of
Hon
ours
gra
duat
es
100
00
1717
+717
0%Ta
rget
exc
eede
d. T
his
prog
ram
me
was
pri
oriti
sed
thro
ugh
the
Dis
creti
onar
y G
rant
s Fu
ndin
g M
odel
in
2012
/13
and
enco
urag
ed
mem
ber
com
pani
es to
pa
rtici
pate
. It
was
als
o su
ppor
ted
as a
Str
ateg
ic
Proj
ect s
uppo
rting
une
mpl
oyed
le
arne
rs.
10.1
.6In
crea
se o
utpu
t of
Mas
ters
gra
duat
es10
00
012
12+2
120%
Targ
et e
xcee
ded.
Thi
s pr
ogra
mm
e w
as p
rior
itise
d th
roug
h th
e D
iscr
etion
ary
Gra
nts
Fund
ing
Mod
el in
20
12/1
3 an
d en
cour
aged
m
embe
r co
mpa
nies
to
parti
cipa
te.
10.1
.7In
crea
se o
utpu
t of
Doc
tora
l gra
duat
es5
00
05
50
100%
Targ
et a
chie
ved.
The CHiETA’s Organisational Performance
PRO
GRA
MM
E 10
: MIN
ISTE
R O
F H
ET’S
SER
VIC
E-LE
VEL
AG
REEM
ENT
WIT
H P
RESI
DEN
T SA
(con
tinu
ed)
Annual Report 2012/13
60
The CHiETA’s Organisational Performance
perf
orm
ance
Indi
cato
r20
12/1
3Ta
rget
Act
ual
Q1
Act
ual
Q2
Act
ual
Q3
Act
ual
Q4
tota
lVa
rian
ceSt
atus
2012
/13
Ach
ieve
dCo
mm
ents
10.1
.8In
crea
se o
utpu
t of
Post
Doc
tora
tes
50
00
55
010
0%Ta
rget
ach
ieve
d.
10.1
.9Su
ppor
t Ind
ustr
y an
d U
nive
rsity
pa
rtne
rshi
ps
30
08
08
+526
7%Ta
rget
exc
eede
d. T
his
prog
ram
me
was
pri
oriti
sed
thro
ugh
the
Dis
creti
onar
y G
rant
s Fu
ndin
g M
odel
in
2012
/13
and
enco
urag
ed
mem
ber
com
pani
es to
pa
rtici
pate
. 10
.1.1
0Ba
selin
e23
30
08
321
329
+96
141%
Base
line
targ
et e
xcee
ded.
KEY
Targ
et a
chie
ved
or e
xcee
ded
as p
er c
omm
ents
col
umn
No
targ
ets
set f
or 2
012/
13 a
s pe
r CH
IETA
Str
ateg
ic P
lan
and
APP
201
2/13
Subs
tanti
al m
ovem
ent o
n ac
tual
ach
ieve
men
t, b
ut m
argi
nally
beh
ind
annu
al ta
rget
PRO
GRA
MM
E 10
: MIN
ISTE
R O
F H
ET’S
SER
VIC
E-LE
VEL
AG
REEM
ENT
WIT
H P
RESI
DEN
T SA
(con
tinu
ed)
◊ N
ote:
Tar
gets
ach
ieve
d an
d ex
ceed
ed a
re w
ithin
the
cont
ext o
f the
CH
IETA
Str
ateg
ic P
lan
and
pre-
dete
rmin
ed 2
012/
13 p
erfo
rman
ce
targ
ets
reco
mm
ende
d by
the
CHIE
TA A
ccou
nting
Aut
hori
ty a
nd a
ppro
ved
by th
e M
inis
ter
of H
ighe
r Ed
ucati
on a
nd T
rain
ing.
The catalyst for enhanced skills, economic growth and employability
61
FINANCE
Annual Report 2012/13
62
Finance
Unqualified Audit Opinion:
The CHIETA obtained an unqualified audit opinion for the financial year ended March 2013. This achievement once again confirms the high levels of integrity of financial-management practices and accountability within the organisation.
Revenue:
The skills-development levy (SDL) income earned increased by 15.3% from R330.9 million for the year ended 31 March 2012 to R381.6 million for the year ended 31 March 2013. Total revenue earned increased by 13.9% from R353.4 million in the prior period to R402.3 million in the current financial year. The contribution of the return on invested funds to total revenue was R19.1 million, representing approximately 4.7% of total revenue.
Analysis of trends in skills-development levy income:
The skills-development levy income has increased substantially since inception. Total actual SDL income received for the year ended March 2013 was 851% above the SDL income for the year ended March 2001. (For the entire period since inception to date, SDL income has escalated by an annual equivalent average of approximately 25% − materially exceeding both inflation and estimated annual salary increment in the Chemical Sector each year.) Figure 1 shows the total Skills-Development Levy Income received by the CHIETA in each year since inception.
Another clean audit reflects commitment to sound financial principles
Farhad Motala Chief Financial Officer
The catalyst for enhanced skills, economic growth and employability
63
Finance
Figure 1: Skills-Development Levy Income
Expenditure:
Administration expenses remained within the legislated 10% maximum allowed by the skills-development regulations. The CHIETA realised a saving of over R9.1 million in administration expenses for the financial year ended 31 March 2013. This amount, together with the total investment return of R19.1 million and unclaimed Mandatory Grants to the value of R23.1 million, were transferred to the discretionary reserve at year-end to be utilised for Discretionary Grants and approved strategic projects for sector-skills priorities.
Employer grants and project expenses increased by 35.9% during the financial year from R262.5 million in 2012 to R356.8 million for the year ended 31 March 2013. Expenses on Mandatory Grants represented 90% of the skills-development levy income received for the purposes of Mandatory Grants. Expenses on Discretionary Grants represented 95.6% of the funds that were earned or swept into the discretionary reserve. A total amount of R147.8 million was earned as Discretionary Grant levy income and R141.4 million was expensed in Discretionary Grants and projects during the period.
◊ Financial viability and going concern
Figure 2 shows administration income received against administration expenditure from 2001 to 2013. The CHIETA has sustained its level of operations within the 10% legislated administration provision in each year since inception, without compromising the achievement of its service-level agreement and performance targets. Savings in administration expenses from 2001 to 2013 of over R43 million was reallocated to discretionary reserves, and utilised in Discretionary Grants for Chemical Sector skills’ priorities. These savings are attributed to continuous development of expenditure control and procurement practices within the CHIETA as well as streamlined, effective and efficient human resource capacity.
YEAR
Annual Report 2012/13
64
Figure 2 - Administration Income vs Expenditure
◊ Levy Grant Disbursement as per NSDS targets were exceeded over the entire period since inception.
The CHIETA has exceeded its NSDS targets for grant disbursement for each year since inception.
Figure 3 shows the total SDL income received for grants in each year since inception compared to the total grant and project expenses during this period. The CHIETA has achieved an average disbursement rate of over 91% for the entire period since inception. Figure 3 - SDL Income vs Employer Grants and Project Expenses
Funds, reserves and commitments:
The total funds available in the discretionary reserve increased by R6.4 million from R340.1 million at 31 March 2012 to R346.5 million at 31 March 2013. Of the R346.5 million in the discretionary reserve as at 31 March 2012, R340.4 million is committed to Discretionary Grant contractual obligations. This represents a level of commitment of over 98.2% of the total funds available in the discretionary reserve at 31 March 2013.
Finance
YEAR
YEAR
The catalyst for enhanced skills, economic growth and employability
65
Report of the Audit Committee
The report of the Audit Committee has been prepared in accordance with the Treasury Regulations for Public Entities 27.1.7 and 27.1.10 (b) and (c) issued in terms of the Public Finance Management Act 1 of 1999, as amended by Act 29 of 1999.
We are pleased to present our report for the financial year ended 31 March 2013.
Audit Committee members and attendance
The Audit Committee consists of the members listed hereunder, and is required to meet a minimum of four times per annum as per it’s approved terms of reference. During the current year seven meetings were held.
Summary of meetings attended per independent member:
name13 April
201222 May
20128 June2012
25 July2012
16 october2012
8 november2012
7 March2013
Mr JL Davis (Chairperson) � � � � � � �Adv F Mukaddam X � � � � � XMr M Kepadisa � � � � � � �Mr B Muir � � � � � � �Ms J Klaasen (Appointed 20 July 2012) n/a n/a n/a � � � �
Attended meeting �Apology X
Audit Committee responsibilities
The Audit Committee reports that it has adopted appropriate formal terms of reference as its Audit Committee Charter has regulated its affairs in compliance with this charter, as well as the recommendations of the King III Code of Corporate Governance, and has discharged all its responsibilities as contained therein.
The system of control within the CHIETA is designed to provide reasonable assurance that assets are safeguarded and that liabilities and working capital are properly managed in line with PFMA, and the protocol on corporate governance for public entities. This is achieved by means of the risk-management process, as well as the identification of corrective actions and suggested enhancements to the controls and processes.
From the various reports of the Internal Auditors, the Audit Report on the Annual Financial Statements and the management letter of the Auditor-General, we concluded that the existing control environment required improvement during the year under review in order to provide a reasonable assurance that the organisation’s goals and objectives are being achieved. However, we have, since the time of these reports, received independent confirmation that from the assurance providers that a number of these weaknesses have been rectified. Others, however, are still being attended to. The Audit Committee will monitor on a regular basis, management’s progress in resolving the remaining matters, as required in terms of the Audit Committee Charter.
Annual Report 2012/13
66
Evaluation of Financial Statements
The Audit Committee has:
◊ Reviewed and discussed the audited financial statements to be included in the annual report with the Auditor-General and the Accounting Authority;
◊ Reviewed the Auditor-General’s management report and management’s response thereto;◊ Reviewed adjustments resulting from the audit.
The Audit Committee concurs and accepts the Auditor-General’s conclusion on the annual financial statements, and is of the opinion that the audited annual financial statements be accepted and read together with the report of the Auditor- General.
JL DAVISChairperson of the Audit Committee
Report of the Audit Committee
The catalyst for enhanced skills, economic growth and employability
67
REPORT OF THE AUDITOR-GENERAL TO PARLIAMENT ON THE CHEMICAL INDUSTRIES EDUCATION AND TRAINING AUTHORITY
REPORT ON THE FINANCIAL STATEMENTS
Introduction
1. I have audited the financial statements of the Chemical Industries Education and Training Authority (CHIETA) set out on pages 70 to 110, which comprise the statement of financial position as at 31 March 2013, statement of financial performance, the statement of changes in net assets and the cash-flow statement for the year then ended, the notes, comprising a summary of significant accounting policies and other explanatory information.
Accounting authority’s responsibility for the financial statements
2. The accounting authority is responsible for the preparation and fair presentation of these financial statements in accordance with the South African Standards of Generally Recognised Accounting Practice (SA Standards of GRAP), the requirements of the Public Finance Management Act of South Africa, 1999 (Act No. 1 of 1999) (PFMA) and the Skills Development Act, 1998 (Act No. 97 of 1998) (SDA), and for such internal control as the accounting authority determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor-General’s responsibility
3. My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with the Public Audit Act of South Africa, 2004 (Act No. 25 of 2004) (PAA), the General notice issued in terms thereof and International Standards on Auditing. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
5. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.
opinion
6. In my opinion, the financial statements present fairly, in all material respects, the financial position of the Chemical Industries Education and Training Authority as at 31 March 2013, and its financial performance and cash flows for the year then ended in accordance with SA Standards of GRAP and in the requirements of the PFMA and SDA.
Annual Report 2012/13
68
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
7. In accordance with the PAA and the General notice issued in terms thereof, I report the following findings relevant to performance against predetermined objectives, compliance with laws and regulations and internal control, but not for the purpose of expressing an opinion.
Predetermined objectives
8. I performed procedures to obtain evidence about the usefulness and reliability of the information in the annual performance report as set out on pages 43 to 60 of the annual report.
9. The reported performance against predetermined objectives was evaluated against the overall criteria of usefulness and reliability. The usefulness of information in the annual performance report relates to whether it is presented in accordance with the National Treasury annual reporting principles and whether the reported performance is consistent with the planned objectives. The usefulness of information further relates to whether indicators and targets are measurable (i.e. well defined, verifiable, specific, measurable and time bound) and relevant as required by the national Treasury’s Framework for managing programme performance information (FMPPI).
The reliability of the information in respect of the selected objectives is assessed to determine whether it adequately reflects the facts (i.e. whether it is valid, accurate and complete).
10. There were no material findings on the annual performance report concerning the usefulness and reliability of the information.
Compliance with laws and regulations
11. I performed procedures to obtain evidence that the entity has complied with applicable laws and regulations regarding financial matters, financial management and other related matters. My findings on material non-compliance with specific matters in key applicable laws and regulations as set out in the General notice issued in terms of the PAA are as follows:
Annual financial statements
12. The financial statements submitted for auditing were not in all material respects prepared in accordance with the requirements of Section 55(1) of the PFMA. Material misstatements on Discretionary Grants reserve commitments identified by the auditors in the submitted financial statements were subsequently corrected.
Internal control
13. I considered internal control relevant to my audit of the financial statements, programme performance report and compliance with laws and regulations. The matters reported below under the fundamentals of internal control are limited to the significant deficiencies that resulted in the findings on compliance with laws and regulations included in this report.
REPORT OF THE AUDITOR-GENERAL TO PARLIAMENT ON THE CHEMICAL INDUSTRIES EDUCATION AND TRAINING AUTHORITY
The catalyst for enhanced skills, economic growth and employability
69
leadership
14. Adequate oversight was not always exercised regarding financial reporting and related internal controls.
Financial performance management
15. Although policies and procedures were in place, there were material adjustments to the financial statements with regard to the Discretionary Grants reserve commitments. This could be attributed to the fact that existing controls in respect to the monthly processing and reconciling of Discretionary Grants reserve commitments were not enhanced to ensure adequate, accurate and complete financial reporting.
Pretoria31 July 2013
REPORT OF THE AUDITOR-GENERAL TO PARLIAMENT ON THE CHEMICAL INDUSTRIES EDUCATION AND TRAINING AUTHORITY
Annual Report 2012/13
70
The Annual Financial Statements for the year ended 31 March 2013, set out on pages 70 to 110, have been approved by the Accounting Authority in terms of section 51(1) (f) of the Public Finance Management Act (PFMA), No 1 of 1999, as amended, on 29 May 2013, and are signed on their behalf by:
Ayesha Itzkin nolitha Fakude Acting Chief Executive Officer Chairperson of the Accounting Authority
Content Page
Report of the Accounting Authority ................................................................................................... 71-77
Statement of Financial Performance ........................................................................................................78
Statement of Financial Position ................................................................................................................79
Statement of Changes in Net Assets ........................................................................................................80
Cash Flow Statement ................................................................................................................................81
Statement of Comparison of Budget and Actual Amounts ......................................................................82
Accounting Policies to the Annual Financial Statements .................................................................... 83-91
Notes to the Annual Financial Statements ....................................................................................... 92-110
Annual Financial Statements for the year ended 31 March 2013
The catalyst for enhanced skills, economic growth and employability
71
Report of the Accounting Authority for the year ended 31 March 2013
29 May 2013
Report by the Accounting Authority to the Executive Authority / Provincial Legislature and Parliament of the Republic of South Africa
1. General review of the state of affairs
1.1 Income
During the period under review the Chemical Industries Education and Training Authority (CHIETA) realised an 15.3% increase in skills development levy income in comparison to the levy income earned for the year ended 31st March 2012. Return on invested funds accounted for R19.1 million of total revenue.
1.2 Expenses
CHIETA administration expenditure remained well within the 10% margin prescribed by the skills development regulations, and administration savings of over R9.1 million representing 19% of the total administration income was transferred to the discretionary reserve at 31st March 2013.
The CHIETA expensed over R356 million in employer grants and project expenses representing more than 107% of grant levy income received for the year of approximately R333 million for the financial year ended 31st March 2013.
1.2.1 discretionary Grants and commitments:
The CHIETA expensed over R141 million in discretionary grants and projects for the financial year, exceeding the prior year expense by 85%. During the financial year under review, management reviewed the entire discretionary grant policy framework, internal controls, processes and procedures, guidelines and funding models for discretionary grant allocations. The objective of the review was to ensure that a credible process was in place to ensure proper accountability within all levels of the organisation for the project management, optimal service delivery and disbursement of discretionary grants. Discretionary grant allocations and funding priorities were also interrogated, ranked and aligned against the priorities of the National Skills Development Strategy 3 (NSDS 3).
During the year under review, applications for discretionary grants were once again over subscribed. After evaluation according to the established criteria, awards of over R164 million was approved. The nature of initiatives supported included:
◊ Programs supporting learners on registered learnerships and workplace experience ◊ Supporting of scarce and critical skills◊ Honouring apprenticeship and artisan training commitments and prioritising new apprenticeship
programmes◊ Supporting partnerships and training initiatives in FET, HET and the chemical industry◊ Providing incentives for workplace experience and employment creation
Annual Report 2012/13
72
◊ Assisting graduates in entering the workplace and enhancing employability through further graduate development programs
◊ Promoting Recognition of prior learning (RPL) and facilitation of strategic research programs
It is the opinion of the accounting authority that the expenditure incurred during the year under review has been well accounted for and that the projects and programmes undertaken have considerably benefited the chemical industries sector as a whole.
As at 31 March 2013, total CHIETA commitments based on outstanding discretionary grant contractual obligations was at R340 million representing 98.2% of the total funds available in the discretionary reserve. This amount included an allocation of R164 million during the year to skills priorities as outlined in note 15.1 on page 101 and 102 of the annual financial statements.
1.2.3 Mandatory Grants
Mandatory Grant participation levels increased substantially on the new electronic on-line submission platform and exceeded anticipated participation projections during the financial period. The mandatory grant expense increased by 22% from R188 million in 2012 to R215 million for the financial year ended 31 March 2013.
2. Services rendered by the Public Entity and Tariff Policy
The CHIETA is a schedule 3A public entity enacted by the Minister of Higher Education and Training in terms of the Skills Development Act and governed by the Public Finance Management Act, Act No.1 of 1999, as amended. The CHIETA facilitates skills development in the chemicals sector. No tariff is charged for services rendered. The CHIETA is funded through skills development levies contributed in terms of the Skills Development Act by employers in the chemicals industries sector.
3. Capacity constraints
Whilst certain capacity constraints were experienced by the organisation for the year under review, these did not impact on the ultimate delivery by CHIETA to its stakeholders, nor was the achievement of our strategic objectives compromised.
4. Utilisation of donor funds
No donor funds were received or expended by the CHIETA for the year under review.
Report of the Accounting Authority for the year ended 31 March 2013
The catalyst for enhanced skills, economic growth and employability
73
5. Business address
2 Clamart Road, Richmond, Johannesburg 2193
6. Controlled entities and Public entities
The CHIETA does not exercise control over any other entities, agencies, organisations or public entities.
7. Other organisations to whom transfer payments have been made
No transfer payments were made by the CHIETA to any other party during the period under review.
8. Public private partnerships (PPP)
No public private partnerships were entered into during the period under review.
9. Discontinued Activities / Activities to be discontinued
No discontinued activities or closure of any major part of the business have occurred during the financial period.
10. New / proposed Activities
No new activities have been proposed.
11. Re-licensing
The CHIETA has been re-established for a five year period until 31 March 2016.
12. Corporate Governance
12.1 Corporate Governance and Compliance with the PFMA
The CHIETA has implemented the recommendations of the Public Finance Management Act (PFMA) and the King Report on Corporate Governance. The CHIETA audit committee met regularly during the financial year in order to perform, inter-alia the following:
◊ the oversight role over the internal audit function ◊ review of CHIETA financial statements and management accounts◊ assessment and review of a fraud prevention plan and code of ethics, ◊ annual independent review and update of policies, procedures and PFMA compliance by the internal
and external audit function
Report of the Accounting Authority for the year ended 31 March 2013
Annual Report 2012/13
74
◊ annual risk assessment and update◊ tracking of and implementation of internal audit recommendations by audit committee and governance
structures◊ consideration of governance and legal compliance with protocols and controls
12.2 Financial Risk Management and systems of control
Section 38(a) of the PFMA requires the accounting authority of a public entity to implement and maintain effective, efficient and transparent systems of financial, risk management and internal controls. The CHIETA has developed detailed financial policies and procedures, and a quality management system to guide internal processes. The CHIETA has implemented various measures to ensure that public funds are managed as required by the PFMA, treasury regulations other applicable acts and regulations and internal and external auditors conduct regular compliance reviews.
The CHIETA Governing Board committed CHIETA to a process of sustained risk management that is aligned to the principles of good corporate governance, relevant legislation and leading practice. Accountability is strongly vested at Governing Board and managerial level on strategic and operational risk management.
The CHIETA has over the last few years embarked upon a comprehensive organisation wide risk management process that was done in a structured, consistent and integrated manner that aligns strategy, processes, people, technology and knowledge towards mitigating risks within acceptable levels. This Chieta Risk Management Framework covers the full spectrum of risks taken in the pursuance of CHIETA objectives and are categorized into strategic and operational risks per the respective functional areas and business processes of the organisation.
Management and monitoring of the CHIETA Risk Management framework are facilitated through regular risk assessments and reporting by management into the Governance structures of CHIETA in terms of relevance, progress and status of risks treatments as per committed deadlines and implementation frameworks.
12.3 Expenditure Control and Procurement Framework
The CHIETA has developed a robust framework for expenditure control, governed by various policies, procedures, delegations and systems, which are updated on a regular basis. A supply chain management policy framework is fully implemented in line with the preferential procurement practice framework act and supply chain management regulations. These policies and procedures are reviewed regularly by the CHIETA management, staff, and internal auditors and adjusted to ensure that current updates in procurement practices are adhered to by the entity.
Report of the Accounting Authority for the year ended 31 March 2013
The catalyst for enhanced skills, economic growth and employability
75
12.4 CHIETA Infrastructure and Security over assets and income
The CHIETA net asset base was approximately R352 million at 31 March 2013. Total net assets increased by R6.4 million as at the financial year ended 31 March 2013.
12.5 Governing Board and Executive Committee Meetings
Governing board members attend quarterly meetings and discuss strategic matters focusing on delivery of the CHIETA mandate.
12.6 Promotion of Accountability and Transparency
12.6.1 Audit Committee
The Audit Committee functions in terms of section 47 of the PFMA and performs a critical governance function. As with the board, its constitutional structure and operation have been considered in relation to best practice recommendations in terms of the King Report and the protocols on corporate governance.
12.6.2 Management Committee
Through involvement with day-to-day business activities, the CHIETA Chief Executive Officer and the management team are responsible for ensuring that decisions, strategies and views of the board are implemented.
12.6.3 Employees
The Human Resources Strategy is founded on human capital development. It also addresses issues that create the conditions and opportunities for previously disadvantaged individuals to take their rightful place at all levels.
12.6.4 Employment Equity
There is continual monitoring and enforcement of employment equity practices..
Report of the Accounting Authority for the year ended 31 March 2013
Annual Report 2012/13
76
13. Remuneration to members of the Accounting Authority an Executive Management
Accounting Authority
Remuneration to members of the Accounting Authority 1 April 2012 to 31 March 2013
name Constituency
Governing Board
Meeting Fee
Committee Meeting
Fee
Once-off Board Fee 5%
Once-off Board Fee 8% total
1. Nolitha Fakude Chairperson - - - - -2. Manene Samela Ministerial Appointee 17 120 24 528 - 41 6493. Chemist Khumalo
(Passed away in 2012-13)
Ministerial Appointee
4 824 - - - 4 8244. Merwe van Pletsen
(Resigned during 2012-13) 2 070 928 - - 2 998
5. Bertie van Baalen NBCEA - - - - -6. Jan Smit NASCEA 21 060 12 128 39 246 72 4337. Tshepo Naka
(Appointed in 2012-13)
Glass
- - - - -8. Jacqui Klaasen
(OMNIA)Explosives and Fertilisers 14 512 15 561 - - 30 073
9. Brian Muir UASA 17 120 11 701 39 246 68 06710. Gerhard Ceronie Solidarity 18 270 14 125 39 246 71 64011. Mosehla Mampho SACWU 18 954 22 801 39 246 81 00012. Dan Nkotsoe GIWUSA 15 672 7 993 39 246 62 91113. Simon Mofokeng
(Appointed in 2012-13)
CEPPWAWU
- - - - -14. George Mnguni DOE - - - - -15. Tshenge Demana DTI - - - - -16. Mike Booth CAIA 8 582 20 461 - 39 245 68 28917. Ingrid Dimo NBCCI 16 034 34 991 - 39 246 90 271
totAl 154 218 140 689 24 528 274 720 594 156
Explanatory Notes to Accounting Authority Remuneration:
1. Some members of the Accounting Authority have elected not to receive any remuneration for their services based on the policy directives of their respective constituency.
Report of the Accounting Authority for the year ended 31 March 2013
The catalyst for enhanced skills, economic growth and employability
77
2. The remuneration level of Accounting Authority members is subject to the legislative and policy frameworks of government, affordability and a dedicated budget. This is based on the annual remuneration framework of Accounting Authority members as approved annually by the Minister of Finance and the Minister of Higher Education and Training.
3. The Accounting Authority meeting fee and Committee meeting fee are paid in accordance with the approved rate as per the treasury conversion key.
4. Over and above the above mentioned Accounting Authority and Committee meeting fees a once off fee is payable to compensate members for time spent on preparation, research and other relevant official duties as requested by the Accounting Authority.
5. Where a member serves only on the Accounting Authority or a single committee, a fee of 5% of the relevant annual remuneration in the applicable treasury conversion key is payable.
6. Where a member serves on the Accounting Authority and more than one committee, a fee of 8% of the relevant annual remuneration in the applicable treasury conversion key is payable.
Executive Management
Remuneration to members of Executive Management1 April 2012 to 31 March 2013
name Designation Basic Allowancesprovidend
Fundperformance
Bonus totalAyesha Itzkin Acting CEO/ETDQA
Executive 750 244 228 422 155 868 204 216 1 338 751Farhad Motala CFO 944 997 189 000 193 470 165 933 1 493 399Trevor Channing Governance & Risk
Executive 705 457 381 945 69 350 144 594 1 301 345Meryl Plasket Research Executive 492 002 5 250 - 32 321 529 574Thapelo Madibeng
Strategic Projects Executive 404 167 33 250 59 836 32 321 529 574
totAl 3 296 867 837 867 478 524 579 386 5 192 644
Chairperson of the CHIETA Accounting AuthorityDate: 29 May 2013
Report of the Accounting Authority for the year ended 31 March 2013
Annual Report 2012/13
78
Annual Financial Statements for the year ended 31 March 2013
Statement of Financial Performancefor the year ended 31 March 2013
2012/13 2011/12note R’000 R’000
NON-EXCHANGE REVENUESkills Development Levy: income 2 381 685 330 953 Skills Development Levy: penalties and interest 1 532 1 726 Other income 2 36
EXCHANGE REVENUEInvestment income 3 19 165 20 712
total revenue 1 402 384 353 427
EXPENSESEmployer grant and project expenses 4 (356 883) (262 584)Administration expenses 5 (39 058) (34 946)Loss on Disposal 6 (29) (159)
Total expenses (395 970) (297 689)
NET SURPLUS FOR THE YEAR 1 6 414 55 738
The catalyst for enhanced skills, economic growth and employability
79
Annual Financial Statements for the year ended 31 March 2013
Statement of Financial Positionfor the year ended 31 March 2013
2012/13 2011/12note R’000 R’000
ASSETS
Current assetsPrepayments and advances (Exchange) 8 49 84 Accounts receivable (Non-Exchange) 9 936 2 029 Cash and cash equivalents 10 428 779 369 596 Inventories 19 65 77
429 829 371 786
Non-current assetsProperty, plant and equipment 6 1 648 871 Other intangible assets 7 127 146
1 775 1 017
TOTAL ASSETS 431 604 372 803
Less: Current liabilitiesAccounts payable 11 78 933 26 546
- Non-Exchange 68 312 14 858 - Exchange 10 621 11 688
78 933 26 546
TOTAL NET ASSETS 352 671 346 257
FUNDS CONTRIBUTED BY:
Funds and reservesAdministration reserve 6 094 6 094 Discretionary reserve 346 577 340 163
TOTAL NET FUNDS 352 671 346 257
Annual Report 2012/13
80
Annual Financial Statements for the year ended 31 March 2013
Statement of Changes in Net Assetsfor the year ended 31 March 2013
Administration reserve
employer grant
reserveDiscretionary
reserve
net accumulated
surplus totalR’000 R’000 R’000 R’000 R’000
Balance at 31 March 2010 6 094 - 243 684 - 249 778
Net Surplus per Statement of Financial Performance - - - 40 741 40 741 Allocation of Net accumulated surplus 1 897 31 438 7 406 (40 741) - Excess reserves transferred to Discretionary reserve (1 897) (31 438) 33 335 - -
Balance at 31 March 2011 6 094 - 284 425 - 290 519
Net Surplus per Statement of Financial Performance - - - 55 738 55 738 Allocation of Net accumulated surplus 7 351 18 249 30 138 (55 738) - Excess reserves transferred to Discretionary reserve (7 351) (18 249) 25 600 - -
Balance at 31 March 2012 6 094 - 340 163 - 346 257
Net Surplus per Statement of Financial Performance - - - 6 414 6 414 Allocation of Net accumulated surplus 9 196 23 121 (25 903) (6 414) - Excess reserves transferred to Discretionary reserve (9 196) (23 121) 32 317 - -
Balance at 31 March 2013 6 094 - 346 577 - 352 671
The catalyst for enhanced skills, economic growth and employability
81
Annual Financial Statements for the year ended 31 March 2013
Cash Flow Statementfor the year ended 31 March 2013
2012/13 2011/12note R’000 R’000
CASH FLOWS FROM OPERATING ACTIVITIESOperating activities
Cash receipts from stakeholders 384 310 331 073 Levies, interest and penalties received 384 310 331 039 Other cash receipts from stakeholders - 34
Cash paid to stakeholders, suppliers and employees (342 830) (341 822)Grants and project payments (304 461) (307 010)Compensation of employees 5.1 (21 153) (17 891)Payments to suppliers and other (17 216) (16 921)
Cash genrated/(utilised) in operations 13 41 480 (10 749)Investment income 3 19 165 20 712
Net cash inflow from operating activities 60 645 9 963
CASH FLOW FROM INVESTING ACTIVITIESPurchase of property, plant and equipment 6 (1 464) (405)Proceeds from disposal of property, plant and equipment 2 2
Net cash outflow from investing activities (1 462) (403)
CASH FLOW FROM FINANCING ACTIVITIESGrants, transfers and funds received - (1 107)
Net cash inflow from financing activities - (1 107)
net increase in cash and cash equivalents 59 183 8 453 Cash and cash equivalents at beginning of year 10 369 596 361 143
Cash and cash equivalents at end of year 10 428 779 369 596
Annual Report 2012/13
82
noteApproved
Budget Actual
Favourable (Unfavourable)
VarianceApproved
Budget Actual
Favourable (Unfavourable)
Variance2012/13 2012/13 2012/13 2011/12 2011/12 2011/12
R’000 R’000 R’000 R’000 R’000 R’000NON-EXCHANGE REVENUE
Skills Development Levy: income 20.1 342 419 381 685 39 266 318 900 330 953 12 053 Skills Development Levy: penalties and interest 20.2 962 1 532 570 908 1 726 818 Other income - 2 2 - 36 36
EXCHANGE REVENUE - Investment income 20.3 15 839 19 165 3 326 16 673 20 712 4 039
total revenue 359 220 402 384 43 164 336 481 353 427 16 946
EXPENSESEmployer grant and project expenses 20.4 302 325 356 883 54 558 302 355 262 584 (39 771)Administration expenses 20.5 56 895 39 058 (17 837) 34 126 34 946 820 Loss on Disposal 20.6 - 29 29 - 159 159
Total expenses 359 220 395 970 36 750 336 481 297 689 (38 792)
NET SURPLUS FOR THE YEAR - 6 414 6 414 - 55 738 55 738
Annual Financial Statements for the year ended 31 March 2013
Statement of Comparision of Budget and Actual Amountsfor the year ended 31 March 2013
The catalyst for enhanced skills, economic growth and employability
83
Accounting Policy Notes to the Annual Financial Statements for the year ended 31 March 2013
1. ACCOUNTING POLICY
1.1 Basis of preparation
The financial statements have been prepared in accordance with the effective Standards of Generally Recognised Accounting Practices (GRAP) including any interpretations, guidelines and directives issued by the Accounting Standards Board.
1.2 The cash flow statement has been prepared in accordance with the direct method.
1.3 Specific information such as:
(a) receivables from non-exchange transactions, including taxes and transfers;(b) taxes and transfers payable; and(c) trade and other payables from non-exchange transactions must be presented separately on the
statement of financial position.
1.4 The amount and nature of any restrictions on cash balances is required to be disclosed.
The principal accounting policies adopted in the preparation of these financial statements are set out below and are, in all material respects, consistent with those of the previous year, except as otherwise stated.
1.5 The financial statements have been prepared on the historical cost basis, except where adjusted for present / fair values as required by the relevant accounting standard.
1.6 New Accounting Pronouncements
At the date of authorisation of these financial statements, there are Standards and Interpretations in issue but not yet effective. These include the following Standards and Interpretations that are applicable to the SETA and may have an impact on future financial statements.
Effective DateRelated party GRAP 20 Not yet Effective
An entity shall apply Standards of GRAP for Annual Financial Statements covering periods beginning on or after a date to be determined by the Minister of Finance in a regulation to be published in accordance with section 91(1)(b) of the PFMA.
GRAP 20 : Related Party
This standard prescribe the disclosure of information relevant to draw attention to the possibility that the Seta financial position and surplus/deficit may have been affected by the existence of related parties. It is not expected that this standard will significantly impact future disclosures.
Annual Report 2012/13
84
The following Standards and Interpretations that have been issued but are not yet affective are not applicable to the SETA and will not have an impact on future financial statements:
Effective date, commencing on or after Segment Reporting GRAP 18 Not yet EffectiveTransfer of Function between Entities Under Common Control
GRAP 105 Not yet Effective
Transfer of Function between Entities Not Under Common Control
GRAP 106 Not yet Effective
Mergers GRAP 107 Not yet Effective
1.7 Going Concern
The financial statements have been prepared on the going concern basis, as the CHIETA does not see any reason to significantly curtail its operations in then foreseeable future.
2.1 Currency These financial statements are presented in South African rands as this is the currency in which the entity’s
transactions are denominated. Figures have been rounded of to the nearest thousand (R’000).
3.1 Revenue recognition Skills Development Levy (SDL) transfers are recognised when it is probable that future economic benefit will
flow to the SETA and these benefits can be measured reliably. This occurs when the department of higher education and training (DHET), either makes an allocation or payment, whichever comes first, to the SETA, as required by section 8 of the Skills Development Levies Act, 1999 (Act No. 9 of 1999) Skills Development levies are recognised at the fair value of the consideration received
3.2 levy income In terms of section 3(1) and 3(4) of the Skills Development Levies Act, 1999 (Act No. 9 of 1999), registered member companies of the SETA pay a skills development levy of 1% of the total payroll cost to the South African Revenue Services (SARS). 80% of skills development levies are paid over to the SETA (net of the 20% contribution to the National Skills Fund).
Revenue is adjusted for inter-SETA transfers due to employers changing SETA’s. Such adjustments are disclosed separately as inter-SETA transfers. The amount of the inter-SETA adjustment is calculated according to the Standard Operating Procedures issued by the Department of Labour in June 2001. When a new employer is transferred to the SETA, the levies transferred by the former SETA are recognised as revenue and allocated to the respective category to maintain its original identity.
3.3 Interest and penalties Interest and penalties on the skills development levy is recognised on the accrual basis.
Accounting Policy notes to the Annual Financial Statements for the year ended 31 March 2013
The catalyst for enhanced skills, economic growth and employability
85
Accounting Policy notes to the Annual Financial Statements for the year ended 31 March 2013
3.4 Funds allocated by the National Skills Authority for special projects
Funds transferred by the National Skills Authority are accounted for in the financial statements of the SETA as a liability until the related eligible special project expense are incurred, when the liability is extinguished and revenue recognised.
Property, plant and equipment acquired for the project are capitalised in the financial statements as the SETA controls such assets for the duration of the project. Such assets can however only be disposed of in terms of agreement and specific written instructions by the National Skills Authority.
3.5 Government grants and other donor income
Conditional government grants and other conditional donor funding received are recorded as deferred income when it becomes receivable and are then recognised as income on a systematic basis over the period necessary to match the grants with the related costs which it was intended to compensate. Unconditional grants received are recognised when the amounts have been received.
3.6 Investment income
Interest income is accrued on a time proportion basis, taking into account the principal amount outstanding and the effective interest rate over the period to maturity.
4.1 Grants and project expenditure A registered company may recover a maximum of 50% of its total levy payment by complying with the grant criteria in accordance with the Skills Development Regulations issued in terms of the Skills Development Act 1999 (Act No 9 of 1999). Mandatory grants The grant payable and the related expenditure are recognised when the employer has submitted an application for a grant in the prescribed form by 30 June 2012. The grant is equivalent to 50% of the total levies paid by the employer during the corresponding financial period for the skills planning grant and implementation grant. Discretionary grants and project expenditure The funding for discretionary grants and projects comprise 20% of the total levies paid by the employers, levy grants that are not claimed by employers, the surplus of administration levies not utilised, investment income, and other income generated by the SETA. A SETA may out of any surplus monies determine and allocate discretionary grants to employers, education and training providers and workers of the employers who have submitted an application for a discretionary grant in the prescribed form within the agreed upon cut-off period. Project expenditure comprise:
◊ costs that relate directly to the specific contract; ◊ costs that are attributable to contract activity in general and can be allocated to the project; and◊ such other costs as are specifically chargeable to the Seta under the terms of the contract.
Annual Report 2012/13
86
Such costs are allocated using methods that are systematic and rational and are applied consistently to all costs having similar characteristics. Project costs are recognised as expenses in the period in which they are incurred. A receivable is recognised net of a provision for irrecoverable amounts for incentive and other payments made to the extent of expenses not yet incurred in terms of the contract.
5.1 Irregular and fruitless and wasteful expenditure Irregular expenditure means expenditure incurred in contravention of, or not in accordance with, a
requirement of any applicable legislation.
Fruitless and wasteful expenditure means expenditure that was made in vain and would have been avoided had reasonable care been exercised.
All irregular and fruitless and wasteful expenditure is charged against income in the period in which they are incurred.
6.1 Property, plant and equipment Property, Plant and equipment are stated at historical cost less accumulated depreciation and accumulated impairment. Depreciation is calculated on the straight-line method to write-off the cost of each asset over its estimated useful life.
◊ Computer equipment 50%◊ Office furniture and fittings 10%◊ Office equipment 10%
The depreciation charge is to depreciate the book value over the the useful life of the asset to its assessed residual value. Depreciation is calculated and provided for on an annual basis. If the residual value of an asset is at least equal to its carrying amount, depreciation will cease.
The expected useful life of assets within each class differs, since all of the assets are expected to be in use over the life of the SETA. The depreciation of assets commences on the date that the asset is available for use, even if it is not yet in use. The estimated useful life of the assets are limited to the remaining period of the licence issued to the CHIETA by the Minister of Higher Education and Training. For the current year the remaining period is 4 years (2011: 5 years). Useful life of assets are re-assessed at the end of each financial year. The following factors were considered to determine the useful life of the asset:
◊ Expected usage of the asset; ◊ Expected physical wear and tear of the asset; ◊ Technical obsolescence; and ◊ Legal or other limits on the use of the asset.
Accounting Policy notes to the Annual Financial Statements for the year ended 31 March 2013
The catalyst for enhanced skills, economic growth and employability
87
Accounting Policy notes to the Annual Financial Statements for the year ended 31 March 2013
Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount (i.e. impairment losses are recognised).
Gains and losses on disposal of property, plant and equipment are determined by reference to their carrying amount and are taken into account in determining operating profit. Intangible Assets Intangible assets held for use are stated in the balance sheet at amortised cost ,being the initial cost price less any amortisation and impairment. Amortisation is charged so as to write off the cost of intangible assets over their estimated useful lives, using the straight-line method as following:
◊ Computer Software 50% The useful lives of intangible assets are reassessed at the end of each financial year.
7.1 Finance and operating lease agreements Leases of assets under which all the risks and benefits of ownership are effectively retained by the lessor are
classified as operating leases. Payments made under operating leases are charged to the income statement based on actual straight lined and accrued payments. When an operating lease is terminated before the lease period has expired, any payment required to be made to the lessor by way of penalty is recognised as an expense in the period in which termination take place.
8.1 Retirement benefit costs The SETA provides for retirement benefits for all its permanent employees through a defined contribution
scheme that is subject to the Pension Funds Act, 1956 as amended. In terms of the Pension Funds Act, the fund is not required to be actuarially valued. Contributions are at a rate of 14.88% of pensionable emoluments.
The SETA’s contribution to the defined contribution plans is charged to the income statement in the year to
which they relate and no future liability exists for the CHIETA.
9.1 provisions Provisions are recognised when the SETA has a present legal or constructive obligation as a result of past events, and it is probable that this will result in an outflow of economic benefits that can be estimated reliably.
9.2 Provision for employee entitlements The cost of other employee benefits is recognised during the period in which the employee renders the
related service. Employee entitlements are recognised when they accrue to employees. A provision is made for the estimated liability as a result of services rendered by employees up to the balance sheet date. Provisions included in the balance sheet are provisions for leave (based on the current salary rates), bonuses and termination benefits.
Annual Report 2012/13
88
9.3 Provision for grants A provision is recognised for grant payments once the specific criteria set out in the regulations to the Skills
Development Act, 97 of 1998 has been complied with by member companies and it is probable that the SETA will approve the payment. The measurement of the obligation involves an estimate, based on the established pattern of past practice of approval for each type of grant.
No provision is made for projects approved at year-end, unless the service in terms of the contract has been
delivered or the contract is of an onerous nature. Where a project has been approved, but has not been accrued for or provided for, it is disclosed as commitments in the notes to the financial statements.
10.1 Financial instruments Recognition Financial assets and financial liabilities are recognised on the SETA’s balance sheet when the SETA becomes a
party to the contractual provisions of the instrument. Measurement Financial instruments are initially measured at cost, which includes transaction costs. Subsequent to initial
recognition these instruments are measured as set out below.
10.2 Financial assets The Seta’s principle financial assets are accounts and other receivable and cash and cash equivalents. Investments and loans The following categories of investments are measured at subsequent reporting dates at amortised cost by using the effective interest rate method if they have a fixed maturity, or at cost if there is no fixed maturity:
◊ Loans and receivables originated by the group;◊ Held-to-maturity investments; and◊ An investment that does not have a quoted market price in an active market and whose fair value
cannot be measured reliably. Cost and amortised cost are inclusive of any impairment loss recognised to reflect irrecoverable amounts. The financial assets are subject to review for impairment at each balance sheet date. Investments other than those listed above are classified as available-for-sale investments or investments held-for-trading and are measured at subsequent reporting dates at fair value without any deduction for transaction costs that may be incurred on sale or other disposal. Accounts and other receivables Accounts and other receivables are stated at amortised cost as reduced by appropriate allowances for estimated irrecoverable amounts.
Accounting Policy notes to the Annual Financial Statements for the year ended 31 March 2013
The catalyst for enhanced skills, economic growth and employability
89
Accounting Policy notes to the Annual Financial Statements for the year ended 31 March 2013
Cash and cash equivalents Cash and cash equivalents are measured at fair value.
10.3 Financial liabilities The SETA’s principal financial liabilities are accounts and other payables. All financial liabilities are measured at amortised cost, comprising original debts less principle payments and amortisations, except for financial liabilities held-for trading and derivative liabilities, which are subsequently measured at fair value. Gains and losses arising from a change in the fair value of financial instruments, other than available-for-sale financial assets, are included in net profit or loss in the period in which it arises. Gains and losses arising from a change in the fair value of available-for-sale financial assets are recognised in equity, until the investment is disposed of or is determined to be impaired, at which time the net profit or loss is included in the net profit or loss for the period.
A financial asset or a portion thereof is derecognised when the SETA realises the contractual rights to the benefits specified in the contract, the rights expire, the SETA surrenders those rights or otherwise loses control of the contractual rights that comprise the financial asset. On derecognition, the difference between the carrying amount of the financial asset and the sum of the proceeds receivable and any prior adjustment to reflect the fair value of the asset that had been reported in equity is included in net profit or loss for the period.
A financial liability or a part thereof is derecognised when the obligation specified in the contract is discharged, cancelled, or expires. On derecognition, the difference between the carrying amount of the financial liability, including related unamortised costs, and the amount paid for it is included in net profit or loss for the period. The fair values at which financial instruments are carried at the balance sheet date have been determined using available market values. Where market values are not available, fair values have been calculated by discounting expected future cash flows at prevailing interest rates. The fair values have been estimated using available market information and appropriate valuation methodologies, but are not necessarily indicative of the amounts that the SETA could realise in the normal course of business. The carrying amounts of financial assets and financial liabilities with a maturity of less than one year are assumed to approximate their fair value due to the short-term trading cycle of these items. Financial assets and financial liabilities are offset if there is any intention to realise the asset and settle the liability simultaneously and a legally enforceable right to offset exists.
11.1 Reserves Equity is sub-classified in the balance sheet between the following funds and reserves:
◊ Administration reserve ◊ Employer grant reserve ◊ Discretionary reserve
Annual Report 2012/13
90
This sub-classification is made based on the restrictions placed on the distribution of monies received in accordance with the Regulations issued in terms of the Skills Development Act, 1998 (Act No. 97 of 1998). Member employer company levy payments are set aside in terms of the Skills Development Act and the regulations issued in terms of the Act, for the purpose of: 2012/13 2011/12 % %Administration costs of the SETA 10 10Employer Grant Fund Levy 50 50Mandatory Workplace Skills Planning Grant 50 50Discretionary grants and projects 20 20 80 80 In addition, contributions received from public service employers in the national or provincial spheres of government may be used to pay for its administration costs. Interest and penalties received from SARS as well as interest received on investments are utilised for discretionary grants and projects. Other income received are utilised in accordance with the original source of the income. The net surplus/deficit is allocated to the administration reserve, the mandatory grant reserve and the discretionary fund reserve based on the above table. Surplus funds is moved to the discretionary fund reserve from the administration reserve based on unspent funds at year-end and from the mandatory grant based on unclaimed grants after the prescribed time-frames have elapsed.
11.2 Related parties
CHIETA operates in an economic environment currently dominated by entities directly or indirectly owned by the South African government. All national departments of government and state-controlled entities are regarded as related parties in accordance with Circular 4 of 2005: Guidance on the term “state controlled entities” in context of IAS 24 (AC 126) - Related Parties, issued by the South African Institute of Chartered Accountants. Other related party transactions are also disclosed in terms of the requirements of the accounting standard.
11.3 Inventories Inventories are measured at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.
The cost of inventories comprises of all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.
Accounting Policy notes to the Annual Financial Statements for the year ended 31 March 2013
The catalyst for enhanced skills, economic growth and employability
91
Accounting Policy notes to the Annual Financial Statements for the year ended 31 March 2013
The cost of inventories of items that are not ordinarily interchangeable and goods or services produced and segregated for specific projects is assigned using specific identification of the individual costs.
The cost of inventories is assigned using the first in first out (FIFO) / weighted average formula. The same cost formula is used for all inventories having a similar nature and use to the entity.
When inventories are sold, the carrying amount of those inventories are recognised as an expense in the period in which the related revenue is recognised. The amount of any write-down of inventories to net realisable value and all losses of inventories are recognised as an expense in the period the write-down or loss occurs.
11.3 Commitments and contingencies Commitments comprise those future expenses that CHIETA has committed itself to contractually, but for which a present obligation for the payment thereof does not exist at the reporting date. Accordingly these commitments are not recognised as liabilities but are disclosed in the notes to the annual financial statements. Please refer to note 15.
Annual Report 2012/13
92
Notes to the Annual Financial Statements for the year ended 31 March 2013
1a.
ALL
OCA
TIO
N O
F N
ET S
URP
LUS
FOR
THE
YEA
R TO
RES
ERV
ES F
OR
THE
YEA
R EN
DED
31
MA
RCH
201
3
Man
dato
ry re
serv
eD
iscr
etion
ary
rese
rve
tota
l per
In
com
e St
atem
ent
Adm
inis
trati
on
rese
rve
Man
dato
ry
skill
s pl
anni
ng a
nd
impl
emen
tati
on
gran
tto
tal
Dis
creti
onar
y gr
ants
CH
IetA
pr
ojec
tsto
tal
disc
reti
onar
yTo
tal r
even
ue40
2 38
4 39
087
21
5 47
1 21
5 47
1 14
7 82
6 -
147
826
Skill
s de
velo
pmen
t lev
y: in
com
eA
dmin
levy
inco
me
(10%
)48
283
48
283
-
- -
--
Gra
nt le
vy in
com
e (7
0%)
333
402
-23
8 59
2 23
8 59
2 94
810
-
94 8
10
Skill
s de
velo
pmen
t lev
y:
Pena
lties
and
inte
rest
1 53
2 -
--
1 53
2 -
1 53
2 In
vest
men
t inc
ome
19 1
65
--
- 19
165
-
19 1
65
Oth
er in
com
e2
--
- 2
-2
Tran
sfer
to D
iscr
etion
ary
Rese
rve
-(9
196
)(2
3 12
1)(2
3 12
1)32
317
-
32 3
17
Tota
l exp
ense
s39
5 97
0 39
087
21
5 47
1 21
5 47
1 11
0 24
1 31
171
14
1 41
2 A
dmin
istr
ation
exp
ense
s39
058
39
058
-
- -
--
Loss
on
Dis
posa
l 29
2
9 -
--
--
Empl
oyer
gra
nts
and
proj
ect
expe
nses
356
883
-
215
471
215
471
110
241
31 1
71
141
412
Net
sur
plus
per
sta
tem
ent
of fi
nanc
ial
perf
orm
ance
allo
cate
d6
414
-
- -
37 5
85
(31
171)
6 41
4
The catalyst for enhanced skills, economic growth and employability
93
Notes to the Annual Financial Statements for the year ended 31 March 2013
1a.
ALL
OCA
TIO
N O
F N
ET S
URP
LUS
TO R
ESER
VES
FO
R TH
E YE
AR
END
ED 3
1 M
ARC
H 2
012
Man
dato
ry re
serv
eD
iscr
etion
ary
rese
rve
tota
l per
In
com
e St
atem
ent
Adm
inis
trati
on
rese
rve
Man
dato
ry
skill
s pl
anni
ng a
nd
impl
emen
tati
on
gran
tto
tal
Dis
creti
onar
y gr
ants
CH
IetA
pr
ojec
tsto
tal
disc
reti
onar
yTo
tal r
even
ue35
3 42
7 35
105
18
8 83
5 18
8 83
5 12
9 48
7 -
129
487
Skill
s de
velo
pmen
t lev
y: in
com
eA
dmin
levy
inco
me
(10%
)42
456
42
456
-
- -
--
Gra
nt le
vy in
com
e (7
0%)
288
497
-20
7 08
4 20
7 08
4 81
413
-
81 4
13
Skill
s de
velo
pmen
t lev
y:
Pena
lties
and
inte
rest
1 72
6 -
--
1 72
6 -
1 72
6 In
vest
men
t inc
ome
20 7
12
--
- 20
712
-
20 7
12
Oth
er in
com
e36
-
--
36
-36
Tr
ansf
er to
Dis
creti
onar
y Re
serv
e-
(7 3
51)
(18
249)
(18
249)
25 6
00
-25
600
To
tal e
xpen
ses
297
689
35 1
05
188
835
188
835
47 1
69
26 5
80
73 7
49
Adm
inis
trati
on e
xpen
ses
34 9
46
34 9
46
--
--
- Lo
ss o
n D
ispo
sal
159
159
--
--
-Em
ploy
er g
rant
s an
d pr
ojec
t ex
pens
es26
2 58
4
- 18
8 83
5 18
8 83
5 47
169
26
580
73
749
N
et s
urpl
us p
er s
tate
men
t of fi
nanc
ial
perf
orm
ance
allo
cate
d55
738
-
- -
82 3
18
(26
580)
55 7
38
Annual Report 2012/13
94
Notes to the Annual Financial Statements for the year ended 31 March 2013
2. SKILLS DEVELOPMENT LEVY INCOME 2012/13 2011/12note R’000 R’000
The total levy income per the Income Statement is as follows:Levy income: Administration 48 283 42 456
Skills development levies transferred from department of higher education and training 48 257 42 436 Interseta transfers in 26 20
Levy income: Employer Grants 238 592 207 084 Skills development levies transferred from department of higher education and training 238 461 206 959 Interseta transfers in 131 125
Levy income: Discretionary Grants 94 810 81 413 Skills development levies transferred from department of higher education and training 94 757 81 374 Interseta transfers in 53 39
381 685 330 953
3. INVESTMENT INCOMEInterest income 19 165 20 712
Bank deposits 19 165 20 712
19 165 20 712
4. EMPLOYER GRANT AND PROJECT EXPENSESMandatory grants 215 471 188 835
Disbursed 193 856 232 049 Movement in provisions and accruals 21 615 (43 214)
Discretionary grants 15.1 110 241 47 169 Disbursed 93 219 52 056 Movement in provisions and accruals 17 022 (4 887)
Project expenditure 15.1 31 171 26 580 Disbursed 25 228 26 745 Movement in provisions and accruals 5 943 (165)
356 883 262 584 4.1 Project expenditure consist of:
Direct project costs 31 171 26 580 31 171 26 580
The catalyst for enhanced skills, economic growth and employability
95
Notes to the Annual Financial Statements for the year ended 31 March 2013
5. ADMINISTRATION EXPENSES 2012/13 2011/12note R’000 R’000
Depreciation 619 304 Amortisation of intangibles 59 35 Operating lease rentals (minimum lease payments) 1 639 2 056
Buildings 1 639 2 056 Maintenance, repairs and running costs 244 208
Property and buildings 244 208 Utilities 418 618
Advertising, marketing and promotions, communication 616 310 Consultancy and service provider fees 2 886 1 191 Legal fees 1 369 877 Cost of employment 5.1 21 240 19 366 Travel and subsistence 2 060 1 474 Training and development 282 479 Remuneration to members of the accounting authority 569 706 Remuneration to members of the audit committee 242 346 Internal auditors remuneration 1 080 1 281 External auditor’s remuneration 1 821 1 757
Audit fees 1 821 1 757 Internet Service (ISP) 641 648 Telephone and Fax 634 664 Printing and stationary 669 591 Insurance costs 249 249 Workshop and meetings 454 169
Other 1 267 1 617 39 058 34 946
Refer to the report of the accounting authority for disclosure concerning the remuneration to the members of the Accounting Authority, Chief Executive Officer; Chief Financial Officer and Senior Managers.
Annual Report 2012/13
96
Notes to the Annual Financial Statements for the year ended 31 March 2013
5.1 Cost of employment 2012/13 2011/12note R’000 R’000
Salaries and wages 18 240 16 656 Basic salaries 10 284 12 552
Performance awards 2 923 2 065 Temporary staff 3 960 1 355 Leave provision 1 073 684
Social contributions 3 000 2 710 Medical aid contributions 608 455 Provident fund contributions: defined contribution plans 2 304 2 209 UIF 88 46
21 240 19 366 Allocation of cost of employmentAdministration expenses 5 21 240 19 366
21 240 19 366
Average number of employees 35 34
6. PROPERTY, PLANT AND EQUIPMENT
Cost
Accumulated depreciation/ impairment
Closing carrying amount
Year ended 31 March 2013 R’000 R’000 R’000
Computer equipment 1 514 (979) 535 Office furniture and fittings 2 038 (1 503) 535 Office equipment 1 132 (554) 578 Balance at end of period 4 683 (3 036) 1 648 Made up as follows:
◊ Owned assets 4 683 (3 036) 1 648
Year ended 31 March 2012
Computer equipment 1 505 (1 088) 417 Office furniture and fittings 1 489 (1 356) 133 Office equipment 888 (567) 321 Balance at end of period 3 882 (3 011) 871 Made up as follows:
◊ Owned assets 3 678 (2 807) 871 ◊ Leased assets 204 (204) -
The catalyst for enhanced skills, economic growth and employability
97
Notes to the Annual Financial Statements for the year ended 31 March 2013
Movement summaryfor the Year ended 31 March 2013
Carrying amount
2012 Adjustments Additions Disposals
Depreciation/ Amortisation
charge
Carrying amount
2013R’000 R’000 R’000 R’000 R’000 R’000
Movement summary 2013Computer equipment 417 - 345 (27) (200) 535 Office furniture and fittings 133 - 598 (1) (195) 535 Office equipment 321 - 481 - (224) 578 Balance at end of period 871 - 1 424 (28) (619) 1 648
Movement summary 2012
Computer equipment 404 1 223 (72) (139) 417 Office furniture and fittings 169 - 31 (16) (51) 133 Office equipment 428 (1) 59 (51) (114) 321 Balance at end of period 1 001 - 313 (139) (304) 871
During the reassessment of useful lives and residual values, it has become evident that certain items of property, plant and equipment have become obsolete. Consequently these were scrapped.
7. INTANGIBLE ASSETS - COMPUTER SOFTWARE 2012/13 2011/12R’000 R’000
Opening carry value 146 110 Cost / valuation 494 1 384 Accumulated amortisation (348) (1 274)
Movements during the year (19) 36 Additions / 40 92(Disposals) - (21)Amortisation (59) (35)
Closing carry value 127 146 Cost / valuation 534 494 Accumulated amortisation (407) (348)
During the reassessment of useful lives and residual values, it has become evident that certain computer software have become obsolete. Consequently these were scrapped.
Annual Report 2012/13
98
Notes to the Annual Financial Statements for the year ended 31 March 2013
8. PREPAYMENTS AND ADVANCES 2012/13 2011/12R’000 R’000
Staff Advances 49 52 Prepayments - 32 Closing balance 49 84
9. ACCOUNTS RECEIVABLEDeposits (Non-Exchange) 119 123 Trade receivables (Non-Exchange) 771 1 703 Employer receivable (Non-Exchange) 46 203
936 2 029
CHANGE IN ACCOUNTING ESTIMATE
The main assumption for the reassessment is:
During the period the useful lives of property, plant and equipment as well as the useful lives of intangible assets were re-assessed in line with the requirements of GRAP 17 and GRAP 102. Following the reassessment the remaining useful lives of property, plant and equipment as well as the remaining useful lives of intangible assets were assessed at 3 years. This is attributable to additional / new information that became available during the year regarding the continuance of the various SETA’s. CHIETA will have a licence for the next 3 years, therefore the assets are depreciated in accordance with the period of the licence to continue operating.
The additional information that became available has resulted in a change in the useful lives of the assets of CHIETA, which constitutes a change in accounting estimate in accordance with GRAP 3. The impact of the change in accounting estimate is a reduction in the annual depreciation and amortisation expenses. It is expected that this trend may continue in future periods.
The depreciation and amortisation expenses have decreased as follows for the 2013 financial year:
Before change in estimate
After change in estimate net Decrease
Amortisation: Computer software 82 59 24 Depreciation: Computer equipment 281 200 82 Depreciation: Furniture & fittings 59 195 (137) Depreciation: Office equipments 67 224 (156)
490 677 (188)
The catalyst for enhanced skills, economic growth and employability
99
Notes to the Annual Financial Statements for the year ended 31 March 2013
9.1 Bad debts written off 2012/13 2011/12R’000 R’000
Employee receivable - 55Amounts written-off - (55)
Employee receivable - -
10. CASH AND CASH EQUIVALENTSCash at bank and in hand 428 779 369 596
Cash at bank 428 774 369 595 Cash on hand 5 1
Cash and cash equivalents at end of year 428 779 369 596
As required in Treasury Regulation 31.2, National Treasury approved the banks where the CHIETA bank accounts are held. The weighted average interest rate on short term bank deposits was 5 % (2012: 5%).
Cash includes cash on hand and cash with banks. Cash equivalents are short term, highly liquid investments that are held with registered banking institutions with maturities of three months or less and that are subject to an insignificant risk of change in value.
For the purposes of the cash flow statement, cash and cash equivalents comprise cash on hand, deposits held at call with banks, and investments in money market instruments.
11. ACCOUNTS PAYABLE 2012/13 2011/12note R’000 R’000
68 312 14 858 Skills development grants payable - mandatory (Non-Exchange) 33 266 11 651 Skills development grants payable - discretionary (Non-Exchange) 20 053 3 031 Project creditors (Non-Exchange) 5 955 12 Interseta payables (Non-Exchange) 18 164 164 SARS Payable (Non-Exchange) 8 874 -
Sundry payables 10 621 11 688 Other Accruals (Exchange) 4 294 5 840 Leave and Bonus pay accrual (Exchange) 11.1 4 003 3 916 Service provider fees outstanding (Exchange) 2 043 1 819 Trade payables (Exchange) 281 113
78 933 26 546
Annual Report 2012/13
100
Notes to the Annual Financial Statements for the year ended 31 March 2013
13. RECONCILIATION OF NET CASH FLOW FROM OPERATING ACTIVITIES TO NET SURPLUS
2012/13R’000
2011/12R’000
Net surplus as per statement of financial performance 6 414 55 738 Adjusted for non-cash items:
Depreciation 619 304 Amortisation 59 35
Adjusted for items separately disclosed:Investment income (19 165) (20 712)Finance costs 27 157
Adjusted for working capital changes:(Increase) in receivables 1 104 (1 689)Increase / (decrease) in payables 52 387 (44 538)Decrease in prepayments and advances 35 (44)
Cash generated from operations 41 480 (10 749)
14. CONTINGENCIES
In terms of the PFMA, all surplus funds as at year-end may be forfeited to National Treasury. The CHIETA has requested formal rollover of any unspent funds and has communicated this in writing as per National treasury requirements. No formal approval has as yet been obtained from National Treasury to retain surplus funds at the time of submission of these Annual Financial Statements.
11.1 leave and Bonus pay accrual
employee leave provision
employee bonus
provision
2012/13R’000
2011/12 R’000
Open carrying amount 1 015 2 901 3 916 2 441 Amounts utilised (1 015) (2 901) (3 916) (2 441)Change in estimate 1 043 2 960 4 003 3 916 Closing carrying amount 1 043 2 960 4 003 3 916
Current 1 043 2 960 4 003 total 1 043 2 960 4 003
Employee entitlements relate to leave credits available to employees of the CHIETA. Leave balances of employees are multiplied by the daily rate of each employees salary and quantified to the amount of leave credits available.
12. NATIONAL SKILLS FUND: SPECIAL PROJECTS 2012/13 2011/12R’000 R’000
Opening balance - 1 107 Reimbursed to National Skills Fund - (1 107)Closing balance - -
During the current year no liability was recognised as no funds were received from the NSF. As at year end no further liability was outstanding to the National SKills Fund.
The catalyst for enhanced skills, economic growth and employability
101
Notes to the Annual Financial Statements for the year ended 31 March 2013
15.
COM
MIT
MEN
TS
15.1
Dis
creti
onar
y re
serv
e
Of t
he b
alan
ce o
f R34
6,61
4 (R
’000
) ava
ilabl
e in
the
Dis
creti
onar
y re
serv
e at
the
end
of M
arch
201
3, R
340,
486
(R’0
00) h
as b
een
appr
oved
an
d al
loca
ted
for
disc
retio
nary
gra
nts
and
subs
tanti
al p
ortio
ns o
f co
ntra
ctua
l obl
igati
ons
have
bee
n m
et.
Dur
ing
the
finan
cial
yea
r an
am
ount
of R
110,
241
(R’0
00) w
as u
tilis
ed o
n co
ntra
ctua
l del
iver
able
s.
Dis
creti
onar
y G
rant
Pro
gram
s
Ope
ning
ba
lanc
e 20
11/1
2
App
rove
d by
A
ccou
nting
A
utho
rity
not
Co
ntra
cted
A
djus
tmen
ts
Uti
lised
Ope
ning
ba
lanc
e 1
Apr
il 20
12
App
rove
d by
A
ccou
nting
A
utho
rity
not
Co
ntra
cted
A
djus
tmen
ts
Uti
lised
tota
l Co
mm
itm
ent
31 M
arch
20
13R’
000
R’00
0 R
’000
R’
000
R’00
0R’
000
R’00
0R’
000
R’00
0A
dult
Basi
c Ed
ucati
on a
nd
Trai
ning
(ABE
T)8
645
4 23
1 -
2 85
0 10
027
4
111
(71
0)3
964
9
463
App
renti
ce /
A
rtisa
n tr
aini
ng
and
deve
lopm
ent
20 9
96
29 2
70
-4
573
45 6
93
31 7
43
3 84
0 13
524
67
752
Re
cogn
ition
of
Prio
r Le
arni
ng
(RPL
)2
113
5 60
5 -
345
7 37
3 2
713
(31
8)1
111
8
657
Broa
d Ba
sed
Blac
k Ec
onom
ic
Empo
wer
men
t6
860
6 74
4 -
656
12 9
48
5 65
9
(
156)
3 43
0 15
020
Ca
reer
Gui
danc
e1
125
904
-37
4 1
655
3 27
5
(1
000)
4
97
3
433
Furt
her
Educ
ation
an
d Tr
aini
ng (F
ET)
41 8
17
73 9
22
(
480)
7 92
0 10
7 33
9 20
198
(6
791)
25 5
16
95 2
30
Foun
datio
nal
Lear
ning
-
715
-11
2 60
3 1
450
2
7
313
1 76
7 G
radu
ate
Dev
elop
men
t4
234
5 93
4
(17
1)4
535
5 46
2 8
265
664
5 11
1
9 28
0 H
ighe
r Ed
ucati
on
and
Trai
ning
(HET
) /
Burs
arie
s3
728
7 98
0 -
1 00
0 10
708
5
128
(1 7
27)
6 74
6
7 36
3
Notes to the Annual Financial Statements for the year ended 31 March 2013
Annual Report 2012/13
102
Dis
creti
onar
y G
rant
Pro
gram
s
Ope
ning
ba
lanc
e 20
11/1
2
App
rove
d by
A
ccou
nting
A
utho
rity
not
Co
ntra
cted
A
djus
tmen
ts
Uti
lised
Ope
ning
ba
lanc
e 1
Apr
il 20
12
App
rove
d by
A
ccou
nting
A
utho
rity
not
Co
ntra
cted
A
djus
tmen
ts
Uti
lised
tota
l Co
mm
itm
ent
31 M
arch
20
13R’
000
R’00
0 R
’000
R’
000
R’00
0R’
000
R’00
0R’
000
R’00
0In
stitu
tes
of
sect
oral
Exc
elle
nce
/ In
fras
truc
ture
D
evel
opm
ent
1 53
3
-
-71
1
462
2 01
6 -
3 30
5
17
3 In
tern
ship
s6
812
6 60
8 -
741
12 6
79
21 2
37
(59
2)3
772
29 5
52
GET
C Le
aner
ship
s12
766
10
203
-
5 88
6 17
083
3
968
(
1 31
0)7
167
12 5
73
SMM
E’s,
CO
OPS
, N
GO
s, N
LPEs
, an
d N
POs/
NVC
Su
ppor
t10
765
1
560
-4
236
8 08
9 6
230
(
1 60
0)2
582
10 1
37
NAT
ION
AL
PRIO
RITI
ES52
6 70
3 -
1 29
4 (6
5)
4 35
1
(2
240)
1 78
6
26
0 Re
sear
ch
-
-
--
- 12
214
(
776)
5 63
6
5 80
2 Sk
ills
Prog
ram
s14
815
7
327
-6
323
15 8
19
7 87
5
(
136)
6 51
7 17
042
W
orkp
lace
Ex
peri
ence
21 0
06
25 8
77
(
108)
5 57
8 41
197
11
797
(3
895)
15 5
57
33 5
42
Wor
k Pl
acem
ent
/ Em
ploy
men
t Cr
eatio
n(8
94)
7 02
9 -
665
5 47
0 8
751
14
4 3
052
11 3
13
Labo
ur
cons
titue
ncy
capa
city
bui
ldin
g-
--
--
4 00
0
(1
219)
6
54
2
127
tota
l15
6 84
7 19
4 61
2
(75
9)47
157
30
3 54
2 16
4 98
1 (1
7 79
7)11
0 24
1 34
0 48
6
Notes to the Annual Financial Statements for the year ended 31 March 2013
15.1
Dis
creti
onar
y re
serv
e (c
onti
nued
)
The catalyst for enhanced skills, economic growth and employability
103
Stra
tegi
c Se
ctor
pr
ojec
ts
Ope
ning
ba
lanc
e 20
11/1
2
App
rove
d by
A
ccou
nting
A
utho
rity
Adj
ustm
ents
U
tilis
ed
Ope
ning
ba
lanc
e 1
Apr
il 20
12
App
rove
d by
A
ccou
nting
A
utho
rity
not
Co
ntra
cted
A
djus
tmen
ts
Uti
lised
tota
l Co
mm
itm
ent
31 M
arch
20
13R’
000
R’00
0R’
000
R’00
0R’
000
R’00
0R’
000
R’00
0R’
000
Qua
lity
Ass
uran
ce
and
prov
ider
su
ppor
t 19
5 3
100
(99)
3
394
- 7
555
1051
6 50
4
-
Ch
emic
al
indu
stri
es
Stan
dard
s G
ener
ating
Bod
y 97
-
86
11
- -
--
-
Dev
elop
men
t /
Revi
sion
of
lear
ning
mat
eria
ls
/ as
sess
men
t gu
ides
50
6 -
452
54
-
--
-
-
N
ation
al
Lear
ners
hip
Dev
elop
men
t Pr
ojec
t 15
9 1
100
209
1
050
- -
--
-
Cham
ber
and
stak
ehol
der
supp
ort
98
200
26
272
- 1
900
1380
5
20
-
Regi
onal
St
akeh
olde
r Su
ppor
t 83
6
212
1
385
4
910
- 7
513
13.3
17
500
-
App
renti
cesh
ip
/ A
rtisa
n de
velo
pmen
t 11
2 4
400
502
4 01
0 -
5 13
5 -1
035
238
-
Org
anis
ation
al
wor
k st
udy
and
data
man
agem
ent
889
450
150
1
189
- -
--
-
Notes to the Annual Financial Statements for the year ended 31 March 2013
15.1
Dis
creti
onar
y re
serv
e (c
onti
nued
)
Annual Report 2012/13
104
Stra
tegi
c Se
ctor
pr
ojec
ts
Ope
ning
ba
lanc
e 20
11/1
2
App
rove
d by
A
ccou
nting
A
utho
rity
Adj
ustm
ents
U
tilis
ed
Ope
ning
ba
lanc
e 1
Apr
il 20
12
App
rove
d by
A
ccou
nting
A
utho
rity
not
Co
ntra
cted
A
djus
tmen
ts
Uti
lised
tota
l Co
mm
itm
ent
31 M
arch
20
13R’
000
R’00
0R’
000
R’00
0R’
000
R’00
0R’
000
R’00
0R’
000
Gov
erna
nce
and
stak
ehol
der
capa
city
bui
ldin
g 10
6 2
500
932
1 67
4 -
600
-7
607
-
Re
sear
ch a
nd
eval
uatio
n -
2 36
7
1 7
50
617
- 1
650
-160
1 81
0
-
In
form
ation
, re
sour
ce a
nd Q
MS
- -
(1
) 1
- -
--
-
ISO
E St
rate
gy a
nd
impl
emen
tatio
n 13
3 50
0 75
55
8 -
--
-
-
N
ew V
entu
re
crea
tion
333
-
3
33
- -
--
-
-
Re
mun
erati
on
benc
hmar
king
25
0 -
250
-
- -
--
-
Burs
ary
Sche
me
3 53
7 5
302
3
614
5
225
- 5
000
1510
3 49
0
-
Pr
ojec
ts O
ffice
/
OG
CM
- -
(42)
42
-
--
-
-
In
tegr
ated
M
arke
ting
and
rela
tions
hip
man
agem
ent
549
1 92
0 35
3 2
116
- 3
573
785
2 78
8
-
Cr
itica
l Ski
lls
Lear
ners
hip
400
-
4
00
--
--
-
-
G
rade
12
Mat
hs
and
Scie
nce
250
-
2
50
--
--
-
-
SM
ME
Stra
tegy
/
Vouc
her
Proj
ect
681
3 80
0
3 0
24
1 45
7 -
3 25
0 53
62
714
-
tota
l8
378
31 8
51
13
649
26 5
80
- 36
176
5
005
31 1
71
-
Notes to the Annual Financial Statements for the year ended 31 March 2013
15.1
Dis
creti
onar
y re
serv
e (c
onti
nued
)
The catalyst for enhanced skills, economic growth and employability
105
Notes to the Annual Financial Statements for the year ended 31 March 2013
15.2 Operating Leases 2012/13 2011/12R’000 R’000
Minimum lease payments under operating leases recognised as an expense in the yearAt the reporting date the entity has outstanding commitments under operating leases which fall due as follows: 1 639 2 056
Not later than one year 2 083 1 942 Later than one year and not later than five years 4 098 6 180
6 181 8 123
Operating lease payments represent rentals payable by the entity for certain of its office properties. Leases are negotiated for an average term of 4 years and rentals escalate on average by 8% per annum. The monthly payments for property assessment rates and taxes and municipal charges are included as part of other operating expenditure in the statement of financial performance.
17. FINANCIAL INSTRUMENTS
In the course of the CHIETA operations it is exposed to interest rate, credit, liquidity and market risk. The CHIETA has developed a comprehensive risk strategy in terms of TR 28.1 in order to monitor and control these risks. The risk management process relating to each of these risks is discussed under the headings below.
16. MATERIAL LOSSES THROUGH CRIMINAL CONDUCT, IRREGULAR, FRUITLESS AND WASTEFUL EXPENDITURE
Irregular, Fruitless and Wasteful Expenditure:
To the best of our knowledge, no material losses through criminal conduct, or irregular, fruitless and wasteful expenditure were incurred during the year ended 31 March 2013.
Irregular expenditure 2012/13 2011/12R’000 R’000
Opening balance - 584 Amount condoned - (584)Closing Balance - -
Annual Report 2012/13
106
Floating rate Fixed RateNon-interest
bearing
totAl R’000Year ended 31 March 2013
Amount R’000
Effective interest
rateAmount
R’000
Weighted average effective
interest rate %Amount
R’000Assets
Cash 409 614 5.0% 19 165 5.0% - 428 779 Accounts receivable - - - 936 936
409 614 5.0% 19 165 5.0% 936 429 715 Liabilities
Accounts payable - - - - 78 933 78 933 - - - - 78 933 78 933
Year ended 31 March 2012 Total financial assets 348 884 - 20 712 - - 369 596 Total financial liabilities - - - - 26 546 26 546
348 884 - 20 712 - 26 546 396 142
Credit risk
Financial assets, which potentially subject the CHIETA to the risk of non performance by counter parties and thereby subject to credit concentrations of credit risk, consist mainly of cash and cash equivalents, investments and accounts receivable.
The CHIETA management limits its treasury counter-party exposure by only dealing with well-established financial institutions approved by National Treasury through the approval of their investment policy in terms of Treasury Regulations.
Credit risk with respect to levy paying employers is limited due to the nature of the income received. The CHIETA does not have any material exposure to any individual or counter-party. The CHIETAs concentration of credit risk is limited to the industry in which the CHIETA operates. No events occurred in the industry during the financial year that may have an impact on the accounts receivable that has not been adequately provided for. Accounts receivable are presented net of allowance for doubtful debt.
Notes to the Annual Financial Statements for the year ended 31 March 2013
Interest rate risk
The Seta’s exposure to interest rate risk and the effective interest rates on financial instruments at balance sheet date are as follows:
The catalyst for enhanced skills, economic growth and employability
107
liquidity risk
The CHIETA manages liquidity risk through proper management of working capital, capital expenditure and actual vs forecasted cash flows.
Market risk
The CHIETA is exposed to fluctuations in the employment market for example sudden increases in unemployment and changes in the wage rates. No significant events occurred during the year that the CHIETA are aware of.
Fair values
The CHIETA’s financial instruments consist mainly of cash and cash equivalents, account and other receivables, and account and other payables. No financial instruments were carried at an amount in excess of its fair value. The following methods and assumptions are used to determine the fair value of each class of financial instrument:
Cash and cash equivalents
The carrying amount of cash and cash equivalents approximates fair value due to the relatively short-term maturity of these financial assets.
Accounts receivable
The carrying amount of accounts receivable, net of allowance for bad debt, approximates fair value due to the relatively short-term maturity of these financial assets.
Accounts payable
The carrying amount of account and other payables approximates fair value due to the relatively short-term maturity of these financial liabilities.
Notes to the Annual Financial Statements for the year ended 31 March 2013
Annual Report 2012/13
108
18. RELATED PARTY TRANSACTIONS
Transactions with other SETAs
Interseta transactions and balances arise due to the movement of employers from one SETA to another. The following transactions occurred during the year with other SETAs.
The balances at year-end included in receivables and payables are:2012/13 2011/12
R’000 R’000transfers in/(out)
during the year
Amount receivable/(payable)
transfers in/(out)
during the year
Amount receivable/(payable)
Receivables 210 - 187 - MQA - - 69 -FOODBEV 14 - - - HEALTH AND WELFARE 12 - 114 - BANKSETA 7 - - - AGRISETA - - 4 - SERVICES 178 - -
payables - (164) - (164) W&R SETA - (3) - (3)MQA - (69) - (69)MERSETA - (92) - (92)total 210 (164) 187 (164)
Transactions with Board member representative companies
2012/13 2011/12Constituency of Board Member R’000 R’000
Transacting Company
Transaction type
Amount of the
transaction
Amount receivable/(payable)
Amount of the
transaction
Amount receivable/(payable)
payablesSpeciality chemicals and surface coatings
Barloworld Coatings
Discretionary Grant - - 2 410 2 410
Explosives and fertilizersOmnia
Discretionary Grant 3 640 3 640 - -
Speciality chemicals and surface coatings Plascon
Discretionary Grant - - 11 580 11 580
Base chemicals and petroleum Sasol Limited
Discretionary Grant 20 025 20 025 - -
total 23 665 23 665 13 990 13 990
The above transactions occurred under terms that were no less favourable than those available in similar arm’s length dealings.
Notes to the Annual Financial Statements for the year ended 31 March 2013
The catalyst for enhanced skills, economic growth and employability
109
19. INVENTORIES 2012/13 2011/12R’000 R’000
Inventories consist of : Consumable Stores
Stationary 14 3Marketing / promotional material 51 73
65 76
20. COMPARISON OF BUDGET AND ACTUAL AMOUNTS FOR THE YEAR ENDED 31 MARCH 2013
Legislation requires that the SETA annually, in September submit a budget to the Minister for approval. Any subsequent changes required to the initial budget are approved by the Board on recommendation of the Finance Committee.
20.1 Skills Development Levy: income
The favourable variance in skills development levy income is due to a higher than anticipated return of levies from member companies. The CHIETA budgeted for an 8% increase in levy income for the financial year, and received a 15.3% increment. Based on an analyses of levy income it appears that the employee base in the sector continued to expand during the period in excess of the inflationary target. The increase is also partly due to R11 million worth of UIF levy income incorrectly paid to CHIETA by SARS. The UIF levy constitutes 3% to the total increase in skills development levy income received during the 2012-13 financial year. These levies will be recovered by SARS from future levy payments to the CHIETA in the 2013/14 financial year.
20.2 Skills Development Levy: penalties and interest
Income from penalties and interest arise when employers fail to submit their returns as required by legislation. These amounts typically vary significantly year on year. The full balance is made available for projects.
20.3 Investment income
Investment income was 28% more than what was budgeted for due to competitive interest rates obtained on CHIETA’s investments in 2012/13 as a result of larger than anticipated levy income.
20.4 Employer grant and project expenses
The approved final budget only includes the estimated mandatory grant spending of the current financial year. There was an increase in mandatory grant expenditure due to the increase in levies received and the increase in Work Place Skills Plans submitted by the employers. The approved final budget only includes the estimated project spending of the current financial year. The over expenditure related to increased project expenditure, utilising prior year reserves. This over expenditure is acceptable practice within the SETA environment given the multi year nature of many projects.
Notes to the Annual Financial Statements for the year ended 31 March 2013
Annual Report 2012/13
110
20.5 Administration expenses
Administration expenditure is limited to 10% of levies received. The legislation limit has not been exceeded and the savings will be utilised to fund sector skills priorities, through various projects.
20.6 loss on Disposal
The loss on disposal was not budgeted for as it could not be anticipated at the time that certain property plant and equipment would be obsolete at year end. During the reassessment of useful lives and residual values, it has become evident that certain items of property, plant and equipment have become obsolete. Consequently these were scrapped.
21. CONTINGENCIES
Contingent Liabilities:
The CHIETA is currently defending a claim in the capital sum of R3,600,000 plus interest and legal costs made against the CHIETA by Cedar Park Properties (Pty) Ltd pertaining to the alleged repudiation of the lease agreement entered into by the former CHIETA CEO. The pending legal matter is currently in the pleading stage and management is uncertain of the outcome of the litigation. As reported previously and contrary to the requirements of section 66(3)(b) of the PFMA, the former CEO of CHIETA signed a bank guarantee during the 2010-11 financial year without the approval of the accounting authority. An amount of R561,492 relating to the bank guarantee is subject to the outcome of litigation with the landlord. The total extent of penalties or recovery of expenses that the CHIETA will be subjected to could not be quantified, pending finalisation of litigation with Cedar Park Properties (Pty) Ltd
Contingent Asset:
The CHIETA have instituted a counterclaim in the capital sum of R1,706,936 plus interest and penalties against Cedar Park Properties relating to the recovery of lease rentals that were transferred to Cedar Park properties via a debit order agreement entered into by the former CHIETA CEO. The pending legal matter is currently in the pleading stage and management is uncertain of the outcome of the litigation.
Notes to the Annual Financial Statements for the year ended 31 March 2013
The catalyst for enhanced skills, economic growth and employability
111
Signed on behalf of the accounting authority by:
Ayesha Itzkin nolitha Fakude Acting Chief Executive Officer Chairperson of the Accounting Authority
CONTENTS Page
Objective ................................................................................................................................................112
Legal framework .....................................................................................................................................112
Factors considered in developing the framework ..................................................................................113
Materiality ..............................................................................................................................................115
Significant ...............................................................................................................................................115
Reporting of the framework ...................................................................................................................116
Annexure A .............................................................................................................................................116
Materiality and Significance Framework Policy Statementfor the 2012/2013 financial year
Annual Report 2012/13
112
Objective
The policy is intended to determine material and significant events that warrant disclosure by the Accounting Authority to:
◊ The Executive Authority / Legislature.◊ The National Treasury.◊ The Office of the Auditor-General.
Therefore events of a similar nature as considered material and significant, but does not constitute material and significant will be managed “in-house” by the Accounting Authority in terms of formal enquiries and disciplinary processes defined by the Human Resources policies and procedures.
Legal Framework
In terms of Treasury Regulations, Section 28.1.5, issued in terms of the Public Finance Management Act, Act No. 1 of 1999, the Accounting Authority must develop and agree to a framework of acceptable levels of materiality and significance with the relevant Executive Authority, in consultation with the external auditors.
The specific sections of the Public Finance Management Act that is relevant to:
Materiality are:
◊ section 50(1)(c) – “The Accounting Authority for a public entity must on request, disclose to the Executive Authority responsible for that public entity or the legislature to which the public entity is accountable, all material facts, including those reasonably discoverable, which in any way influence the decision or actions of the Executive Authority or that legislature.”
◊ section 55(2)(b)(i) – “The annual report and financial statements must include particulars of any material losses through criminal conduct and any irregular expenditure, and fruitless and wasteful expenditure that occurred during the financial year.”
◊ section 66(1) – “An institution to which this Act applies may not borrow money or issue a guarantee, indemnity or security, or enter into any other transaction that binds or may bind that institution or the Revenue Fund to any future financial commitment, unless such borrowing, guarantee, indemnity, security, or other transaction is:
− Authorised by this Act; and − In the case of public entities, is also authorised by other legislation not in conflict with this Act; and − In the case of loans by a province or a provincial government business enterprise under the ownership control of
a provincial executive, is within the limits as set in terms of the Borrowing Powers of Provincial Governments Act, 1996 (Act No. 48 of 1996).”
Significance is:
◊ section 54(2) – “Before a public entity concludes any of the following transactions, the Accounting Authority for the public entity must promptly and in writing inform the relevant treasury of the transaction and submit relevant particulars of the transaction to its Executive Authority for approval of the transaction:
Materiality and significance Framework Policy statementfor the 2012/2013 financial year
The catalyst for enhanced skills, economic growth and employability
113
− Establishment or participation in the establishment of a company. − Participation in a significant partnership, trust, unincorporated joint venture or similar arrangement. − Acquisition or disposal of a significant asset. − Commencement or cessation of a significant business activity. − A significant change in the nature or extent of its interest in a significant partnership, trust, unincorporated joint
venture or similar arrangement.”
Factors considered in developing the Framework
The following factors were considered in determining the framework:
◊ Nature of the business
Given the nature of the organisation’s activities i.e. –
− The creation and registration of national standards and qualifications in the sector and sub-sectors. − To curriculate, assess, certify and manage performance in the sector to ensure targeted and generic service skills. − To ensure that a quality learning provision is maintained throughout the sector. − To create and maintain a database to target generic and specific skills development. − To engage in learnerships and skills programme activities. − To implement the Sector Skills Plan.
A lower level of materiality is considered appropriate.
◊ Statutory Requirements
The organisation is a public entity, as contained in Schedule 3A of the Public Finance Management Act, and is governed by legislation applicable to government entities. Such legislation is therefore prepared in terms of good corporate governance and is intended to govern finance, supply-chain management, asset management etc, within the organisation. In light of this, the probability of a material or significant infringement is considered unlikely.
◊ Governance Structure
The Accounting Authority (Governing Board) is represented by its stakeholders i.e. organised employer and employee representation from the sector. The Accounting Authority, in terms of legislation, is accountable for the performance and governance of the organisation to the Executive Authority (Minister of Labour). In terms of governance, the organisation is further directed by the Audit Committee (external members), the External Auditors (the Auditor-General’s office), the Internal Auditors (external firm of auditors).
In view of the external participation in the operations of the organisation, it is considered appropriate to have a lower level of materiality.
Materiality and significance Framework Policy statementfor the 2012/2013 financial year
Annual Report 2012/13
114
◊ Control and Inherent Risks
The following factors were examined in determining the control and inherent risk in the organisation:
− Annual risk assessment. − Three-year internal audit plan. − Fraud prevention plan. − Appropriate procurement policy and modalities. − The implementation and adoption of a quality management system. − Technical competence, skills and experience of staff engaged in the decision making process. − Structure of the Audit Committee with reference to the King Code of Corporate Governance.
In terms of the control and inherent risks, a lower level of materiality is considered appropriate.
◊ Qualitative Factors
Materiality is only related to the size of, and the elements of the financial statements. Misstatements that are large, individually or in aggregate may affect a reasonable user’s assessment. Misstatements may also be material on qualitative grounds. The organisation has considered the following qualitative factors:
− Unusual transactions entered into that are not of a repetitive nature and are disclosable due to the nature and the knowledge thereof, affecting the decision-making of the users of financial statements.
− Sizable increase in the stakeholder base i.e. more member companies contributing SDL to the organisation. − Fraudulent or dishonest behaviour of ALL officers or staff of the organisation. Any rand value will warrant
disclosure. − Operations in regions that are economically unstable or the expansion into new locations. − Operations exposed to volatile markets. − Going concern and liquidity, including loss of significant stakeholders. − Constraints on the availability of capital and credit. − Changes in the industry in which the entity operates. − Developing or offering new products or services. − Entities or business segments likely to be traded or lost. − Complex alliances and joint ventures. − Changes in key personnel, including departure of key executives. − Changes in the IT environment. − Pending litigation and contingent liabilities. − Public accountability to stakeholders, parliament, auditors and the community at large. − The sensitivity of the organisation’s financial information in making decisions. − Inadequate policies and procedures to mislead users. − Material infringement of legislation. − The imposition of regularity restrictions that can impair operating capabilities. − Any transaction entered into that could result in reputation risk. − Application of new or changes in accounting policy.
Materiality and significance Framework Policy statementfor the 2012/2013 financial year
The catalyst for enhanced skills, economic growth and employability
115
Materiality
Definition
Information is material if its omission or misstatement could influence the economic decisions of users taken on the basis of the financial statements. Materiality depends on the size of the item or error judged in the particular circumstances of its omission or misstatement. Thus materiality provides a threshold or cut-off point, rather than being a primary qualitative characteristic which information must have if it is to be useful.
Materiality level
The level of a material loss is assessed at 1% of budgeted total revenue (NSF revenue and VAT excluded, includes levy income, interest and penalties and any other income).
Different levels of materiality can be used and the decision to use a conservative level of 1%, irrespective of whether the transaction / event relates to assets, liabilities, or reserves, is based on the fact that the total assets of the organisation are not considered to be an indicator of performance as the organisation is not an asset- intensive entity. And the revenue component is selected as a basis for the materiality calculation, as the level of activity (Grant and Discretionary disbursements) is dependent on the total revenue received.
Significant
Definition
A transaction is significant if conducting the transaction is vitally important to fulfill the organisation’s mandate and for it to operate effectively.
Significance is larger than materiality, as significant transactions may impact the organisation as a whole. A transaction may be material but not significant, whereas all significant transactions are material.
Significance Level
The organisation will promptly and in writing inform the National Treasury of the transaction and submit relevant particulars of the transaction to its Executive Authority for approval of the transaction. The following transactions will be regarded as significant and will require full disclosure:
− Establishment or participation in the establishment of a company. − Participation in a significant partnership, trust, unincorporated joint venture or similar arrangement. − Acquisition or disposal of a significant asset. − Commencement or cessation of a significant business activity. − A significant change in the nature or extent of its interest in a significant partnership, trust, unincorporated joint
venture or similar arrangement.
Materiality and significance Framework Policy statementfor the 2012/2013 financial year
Annual Report 2012/13
116
Reporting of the Framework
The materiality and significance framework must be updated yearly, preferably before the financial year commences to ensure the identification of material and significant transactions. The framework will further be developed in consultation with the external auditors.
The framework will be included into the:
− Corporate / Strategic Plan and − Annual Report.
The framework will be disclosed as contained in Annexure A attached.
AnneXuRe A
TREASURY REGULATION 28.1.5
“For purposes of “material” [sections 50(1), 55(2) and 66(1) (c) of the Act] and “significant” [Section 54(2) of the Act], the accounting authority must develop and agree to a framework of acceptable levels of materiality and significance with the relevant executive authority in consultation with the external auditors.”
MAteRIAlSection 50 (1)
(1) The accounting authority for a public entity must −
(c) on request, disclose to the executive authority responsible for that public entity or the legislature to which the public entity is accountable, all material facts, including those reasonably discoverable, which in any way influence the decision or actions of the executive authority or that legislature.
Quantitative – 1% of total revenue
Qualitative – events as contained in the Materiality and Significance Framework Policy.
Section 55 (2)
(2) The annual report and financial statements must –
(b) include particulars of –
(i) any material losses through criminal conduct and any irregular expenditure and fruitless and wasteful expenditure that occurred during the financial year
Quantitative – 1% of total revenue
Qualitative – events as contained in the Materiality and Significance Framework Policy
Materiality and significance Framework Policy statementfor the 2012/2013 financial year
The catalyst for enhanced skills, economic growth and employability
117
MAteRIAlSection 66 (1)
(1) An institution to which this Act applies may not borrow money or issue a guarantee, indemnity or security, or enter into any other transaction that binds or may bind that institution or the Revenue Fund to any future financial commitment, unless such borrowing, guarantee, indemnity, security or other transaction –
(a) is authorised by this Act; and
(b) in the case of public entities, is also authorised by other legislation not in conflict with this Act; and
(c) in the case of loans by a province or a provincial government business enterprise under the ownership control of a provincial executive, is within the limits as set in terms of the Borrowing Powers of Provincial Governments Act, 1996 (Act No 48 of 1996).
All events / transactions will require disclosure – 100% compliance
SIGNIFICANTSection 54 (2)
(1) Before a public entity concludes any of the following transactions, the accounting authority for the public entity must promptly and in writing inform the relevant treasury of the transaction and submit relevant particulars of the transaction to its executive authority for approval of the transaction –
(a) establishment or participation in the establishment of a company;
(b) participation in a significant partnership, trust, unincorporated joint venture or similar arrangement;
(c) acquisition of disposal of a significant shareholding in a company;
(d) acquisition or disposal of a significant asset;
(e) commencement or cessation of a significant business activity; and
(f) a significant change in the nature or extent of its interest in a significant partnership, trust, unincorporated joint venture or similar arrangement.
All events / transactions will require disclosure – 100% compliance
Materiality and significance Framework Policy statementfor the 2012/2013 financial year
Annual Report 2012/13
118
CHIETA Staff
Vusimuzi Mkhatshwa, left, Lindiwe Mazibuko, Tshidi Magonare, Jerminah Hlapolosa, Fortune Ngwenya
Manager: Tshidi Magonare
Apprenticeship Training Unit
Meryl Plasket, left, Gift Thutse, Ruth MakwelaResearch and Skills Planning Executive: Meryl Plasket
Research and Skills Planning Division
Ayesha Itzkin, left, Kefilwe MashigoCEO: Ayesha Itzkin
CEO’s Office
The catalyst for enhanced skills, economic growth and employability
119
CHiETA staff
Happiness Mlambo, left, Gina Molefe, Thapelo Madibeng, Thando VeyiStrategic Projects Executive: Thapelo Madibeng
Grants and Projects Unit
Gape Tlolane, left, Charles Daconceicao, Garett Benjamin, Moeketsi Lesia, Rene Diergaardt, Zakhele Xaba, Fikile Makhoba, Thabo Ntuli, Thandekile Sokabase, Ruth Sepabelo, Brenda Mhlongo, Conrad Mphahlela
etQA unit
ETQA Manager: Stuurman Aphane
Annual Report 2012/13
120
Faith Nanemba, left, Roger Andriaanse, Nandipha ElijarRegional Manager: Roger Andriaanse
Western and Northern Cape Regional Office
CHiETA staff
Bennet Kamanga, left, Brenda Ledwaba, Bongani Mtshali, Lindiwe ZunguRegional Acting Manager: Bongani Mtshali
Gauteng and Central Office
Nompumelelo Mlambo, left,Harry Ngobeni, Bongani
Maduna, Farhad Motala, Christancia Brown,
Munya Makota, Sandile Zuma,
Louise Mc Namara.Finance Executive:
Farhad Motala
Finance Division
The catalyst for enhanced skills, economic growth and employability
121
CHiETA staff
Trevor Channing, left, Mongezi Shongwe, Nonhlanhla Kika, Ronnie Naidoo, Thabo Ramathoka
Governance Executive: Trevor Channing
Governance and Risk Division
Glory Nyathi, left, Medupi Marumo, Marriam Maduka, Lindiwe Zungu, Joyce Mjiyakho, Maud MatsieStakeholder Relationship Manager: Glory Nyathi
Stakeholder Relations Unit
Brunette Sacks, left, Isaac Mathoho
Human Resource unit
Aline Naidu, left, Rajen Naidoo, Nelisiwe GumedeBack rowThulasizwe Kojane, left, Olaf Normann, Beevash GansanRegional Manager: Rajen Naidoo
KZN and Eastern Cape Regional Office
Human ResourceManager: Joyce Lotz
Annual Report 2012/13
122
Major events
Annual General Meeting
Research Colloquium
The catalyst for enhanced skills, economic growth and employability
123
Major events
CHIETA National Skills Completion
Thank you to the CHIETA Stakeholders that sponsored the Artisan Skills Competition
Annual Report 2012/13
124
Opening of the CHIETA Office at Ehlanzeni FET College
Major events
The catalyst for enhanced skills, economic growth and employability
125
Annual Report 2012/13
AnnuAl RepoRt2012/2013
CHIETA HEAD OFFICE011 628 7000
CHIETA ANTI-FRAUD HOTLINETOLL FREE 0800 111 173
WEBSITEwww.chieta.org.za
ISBN 978-0-621-41877-4RP133/2013