The slow process of re-establishing the National Skills Fund and putting it on a sound footing is expected to be finalised by end-March 2024 at the earliest.
The fund, which is financed from the skills development levy imposed on employers and which has the aim of upskilling jobless young people and training artisans, has been in a mess for years.
It has been plagued by maladministration, poor governance, fraud and corruption and has been subjected to a forensic investigation, a probe by a ministerial task team and the normal annual audit by the auditor-general. The Hawks are also investigating fraud, corruption and money-laundering in the fund which is in talks with the Special Investigating Unit to pursue civil liability matters as well.
A forensic report by Nexus Forensic Services found there were reasonable grounds for suspicion that corruption, fraud or theft had occurred in many of the NSF’s projects.
The auditor-general issued a disclaimer on the fund’s financial statements in 2019/20 and 2020/21 after finding that it could not properly account for about R5bn over two financial years. The fund received a qualified audit report with findings in R2021/22.
Its total revenue in 2021/22 was R4,3bn, of which R3,8bn was derived from payment of the skills development levy.
Deputy higher education & training minister Buti Manamela told members of parliament’s higher education, science and innovation portfolio committee on Wednesday that while there had been some improvement in the fund, the situation was not yet satisfactory in terms of financial management. He was confident however that a turnaround would be achieved as the recommendations of the various reports were implemented.
An acting CEO, David Mabusela, a CFO, fund manager director and ICT director have been appointed and other vacant positions have been advertised.
The department’s director-general Nkosinathi Sishi and Mabusela updated the committee on the progress made in implementing the recommendations of the various investigation reports. Sishi said seven people implicated in wrongdoing had been suspended and charged and disciplinary hearings before an independent panel would take place next week. Five of these are NSF officials and two are with the Ekurhuleni West TVET College.
Five work streams had been set up to deal with specific aspects of the fund’s operations with the aim to have finalised some of the work by end-March 2024. These streams were focused on governance; business model, operating model and value chain; strategy, innovation and organisational performance; human resources; and change management.
Mabusela said that one of the reasons for the length of time it will take to implement the recommendations of the ministerial task team and deal with the auditor-general’s findings was that there would have to be amendments to the Public Finance Management Act and the Skills Development Act to delineate the functions between the department and the NSF.
The plan is to transfer the fund out of the higher education department and for it to be established as an independent entity with its own constitution or charter.
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