PORTFOLIO COMMITTEE ON HIGHER EDUCATION & TRAINING

PRESENTATION BY DHET

21 April 201009h30 – 12h30

REQUEST FROM THE COMMITTEE– LETTER OF INVITATION BY THE PORTFOLIO

COMMITTEE ON HIGHER EDUCATION & TRAINING• The committee requests the presence of your

leadership in its proposed meeting next week Wednesday. The committee would like to be briefed on:– The Budget and Strategic Plans 2010/11 of the

National Skills Fund (NSF) and – The Budget and Strategic Plans 2010/11 of the

National Skills Authority (NSA).

STRUCTURE OF PRESENTATION

• NATIONAL SKILLS FUND– Preliminary comments: DG DHET, Prof. Mary Metcalfe– Presentation: Acting CD NSF, Mr Eubert Mashabane

• NATIONAL SKILLS AUTHORITY– Preliminary comments: DG DHET, Mary Metcalfe– Preliminary comments: Chairperson NSA, Mr Edward

Majadibodu – Presentation: Acting EO NSA, DDG Mr. Firoz Patel – In support: NSA Secretariat, Mr. Thabo Mashongoane

THE BUDGET AND STRATEGIC PLANS 2010/11 OF THE NATIONAL SKILLS FUND

INTRODUCTORY COMMENTS BY THE DG

• Period of Strengthening– Intention to appoint Acting EO ASAP– Intention to bring in a high-level temporary team to

review and make proposals to strengthen and modernise systems and processes

• Review will be informed by a work on NSF as high-level grant-making body with capacity to advise and monitor

• NSDS3 envisages the NSF as a catalytic fund that leverages the progress we need nationally

• In discussion with Treasury re the NSF as a public entity or public service component

STRUCTURE OF NSF PRESENTATION Acting CD NSF, Mr Eubert Mashabane

1. Overview and mandate of the National Skills Fund (NSF)

2. Context of NSF Strategic Plan 3. Key NSF Strategic Objectives4. NSF MTEF BUDGET & Outputs5. Conclusion

6

1. OVERVIEW AND MANDATE OF THE NATIONAL SKILLS FUND

7

LEGISLATIVE MANDATE:Established & mandated by the following acts:• Skills development Act,1998 (as amended in2008)• Skills development Levies Act,1999• Public Finance Management Act,1999• Public Service Act,1994 as amendedMandated Purposes

• Fund Projects identified in the National Skills Development Strategy (NSDS) as National Priorities or

• Fund other projects related to the achievement of the purpose of the Act as the DG determines

• Administration of the NSF within prescribed limit8

LEGISLATIVE MANDATE (continued)Governance:

Director-General: DHET is the accounting authority of the NSF and must

1.Control the fund2. keep proper records (financial, assets &

liabilities)3. prepare annual financial statements 4. Appoint executive officer who is in the public

service9

Other legal obligations• NSF to be managed in accordance with PFMA• The NSA to advise Minister on the strategic

framework and criteria for the allocation of funds from the NSF

• Investment of surpluses• DG to submit annual financial statements to

NSA for information• Unexpended balances can be carried over to

next financial year

10

CONTEXT OF NSF STRATEGIC PLAN

DHET STRATEGIC PRIORTIESInformed by MTSF PRIORITY NO 4 namelySTRENGHEN THE SKILLS AND HUMAN RESORUCE BASE

DHET Seeks to• develop and support a quality post-school education

and training sector, and to promote access to higher and vocational education and skills development training opportunities which responds to needs of economy, rural development and social integration

NATIONAL SKILLS DEVELOPMENT STRATEGY (NSDS) 2005-2011

NSDS INFORMS THE NSF• Objective 1: Prioritising and communicating critical skills for

sustainable growth, development and equity.• Objective 2: Promoting and accelerating quality training for

all in the workplace.• Objective 3: Promoting employability and sustainable

livelihoods through skills development.• Objective 4: Assisting designated groups, including new

entrants to participate in accredited work, integrated learning and work-based programmes to acquire critical skills to enter the labour market and self-employment.

• Objective 5: Improving the quality and relevance of provision.

KEY STRATEGIC OBJECTIVES OF THE NSF

1. To fund projects identified as national priorities National Skills Development Strategy II and NSDS III

2. To fund other strategic projects as determined by the Director General

3. To develop internal and external structures and systems that effectively and efficiently enable the achievement of the above two goals

Strategic Objective one

• For NSDS 2005-2011 the NSF will implement disbursements under DoL arrangements except any new commitments approved by the DHET in the financial year 2010/11

• For NSDS III, for each new strategic priority develop draft disbursement criteria and procedures

• Recommend criteria and disbursement criteria to the National Skills Authority

• Finalise criteria and disbursement procedure by end March 2011

• Implement NSDS III priorities from 2011 – 2014.• Monitor and evaluate impact of disbursements made.

Strategic Objective two

• Translate project directive into proposed disbursement criteria and procedures

• Recommend criteria and disbursement procedures to the National Skills Authority

• Finalise criteria and disbursement procedures within agreed timeframes

• Implement strategic projects as per criteria and disbursement procedures

• Monitor and evaluate impact of disbursements made

Strategic Objective three

• Improve the capacity and systems of the NSF to disburse funding in an effective and efficient manner;

• Address under-disbursement;• Develop grant funding strategies appropriate to

each project category

NSF MEDIUM TERM BUDGET & OUTPUTS

PLEASE NOTE

• This is a Departmental Draft that needs to be edited and verified it is therefore preliminary as the financial statements and reports are in the process of being prepared for auditing and that it MUST still be tabled at the NSA.

Revenue EstimatesR thousandStatement of financial

performance Audited outcome Revisedestimate Medium-term estimate

2007/08 2008/09 2009/10 2010/11¹ 2011/12¹ 2012/131

Revenue

Non-tax revenue

250 580 400 741 317 894 327 431 343 802 378 182

Other non-tax revenue

250 580 400 741 317 894 327 431 343 802 378 182

Skills development levy

1,301,660 1,493,776 1,598,947 1,736,577 1,889,646 1,984,129

Total revenue 1 552 240 1 894 517 1916841 2 064008 2233 448 2362311

Expenditure estimatesR thousandStatement of financial

performance Audited outcome Revised estimate Medium-term estimate

2007/08 2008/09 2009/10 2010/11¹ 2011/12¹ 2012/131

Expenses

Current expenses 65063 66277 131 600 159 485 179 187 198 417

Compensationof employees

10 945 11 764 25 659 31 638 35 111 40,280

Goods and services 54118 54513 105 941 127 847 144 076 158 137

Transfers and subsidies 732 978 862 549 3, 338 ,879 2 ,858 ,722 2, 612 ,620 2, 163,962

Total expenses 802 275 928826 3 470 479 3 018 207 2 791 807 2362379

Surplus / (Deficit) 749 965 965691 (1553638)² (954 199² (558 359) (68)

Selected IndicatorsPast Current Projections

2008/09 2009/10 2010/11 2011/12 2012/13

#unemployed entering programmes

17 599 9677 18400 12400 12400

Number completing learning programmes

4080 9 570 7 360 4 960 11040

New undergraduate bursaries 4869 4808 2 800 2 800 2 800

new postgraduate bursaries (Critical Skills Support)

997 1088 1 200 1 200 1 200

new ABET learners registered 73 438 55 672 *7500 *5000 *5000

New ABET completing 27 194 15 840 *3750 *2500 *2500

Number of additional unemployed people trained (SDFW)

15 169 0 100 000 100 000 100 000

Number of additional trained unemployed people placed in employment (SDFW)

8885 0 70 000 70 000 70 000

NSF: Conclusion

The NSF will focus and respond to the following Challenges

- Balancing continued performance in a period of change & Integration

- Responding to increased challenges of poverty & unemployment

- Building capacity and system to improve turnaround times

- Improving communication with stakeholders

THE BUDGET AND STRATEGIC PLANS 2010/11 OF THE NATIONAL SKILLS AUTHORITY

INTRODUCTORY COMMENTS BY DG

• Period of strengthening• Linkages to HRDSA• Clarifying advisory and executive functions• Key tasks: consultation in order to advise the

Minster on SETA landscape and NSDS3

STRUCTURE OF NSA PRESENTATIONActing EO, DDG Mr Firoz Patel

• Function of the NSA• Composition• Administration and Support• December 2009 Strategic Planning• NSA Workplan 2010/11 (document

distributed)• NSA Budget 2010/11

Functions of National Skills Authority (1):(a) to advise the Minister on –

(i) a national skills development policy; (ii) a national skills development strategy;(iii) guidelines on the implementation of the national

skills strategy; (iv) the strategic framework and criteria for allocation of subsidies funds from the National Skills Fund; and(v) any regulations to be made;

(b) to liaise with SETAs on –

(i) the national skills development policy;(ii) the national skills development strategy; and(iii) sector skills plans;

Functions of National Skills Authority (2):(c) to report to the Minister on the progress made in the

implementation of the national skills development strategy;(d) to conduct investigations on any matter arising out of the

application of this Act; (d) to liaise with the QCTO on occupational standards and

qualifications; and(e) to exercise any other powers and perform any other duties

conferred or imposed on the Authority by this Act.

(2) For the purposes of investigations referred to in subsection (1) (d), the Authority has the prescribed powers of entry and to question and inspect.

(3) The Authority must perform its functions in accordance with this Act and its constitution.

Summary of NSA Functions

• Advising the Minister (policy, strategy, implementation, NSF allocations)

• Liaising with SETA (policy, strategy, sector skills plans)

• Reporting to Minister on progress in the implementation of the national skills development strategy

• Review Accounts and Balance Sheet of NSF annually

NSA COMPOSITION: 25 voting and 7 non voting

30

ADMINISTRATION AND SUPPORT

• NSA is led by a Chairperson appointed by the Minister and supported by an Executive Officer appointed by Department

• NSA work is broken-down into subcommittees for efficiency and effectiveness

• All NSA activities are supported by the Secretariat• Secretariat renders administration and logistic

services to the NSA• Provides liaison functions between DHET, NSA and

other stakeholders

Key Outcomes of NSA Strategic Planning, December 2009

• Strengthening the NSA to perform its advisory functions

• Providing a realistic budget to a work plan proposed by the NSA

• Process to align HRDSA and NSDS:– Content– Reporting/ communication between HRDSA and NSA

• New NSA Chair had to be appointed before February NSA Meeting

• Job description for NSA EO had to be approved at the February NSA meeting after which the post will be advertised and filled

32

NSA PROGRESS ON OUTCOMES OF WORKSHOP

Strategic Plan and Budget of NSA

• See Document distributed: DRAFT NSA WORK PLAN 20010 – 11, tabled at NSA Meeting of 16th April, was noted and referred to Sub-Committees of NSA

• The estimates of national expenditure for 2010/11 allocate the NSA National Skills Authority Secretariat R5,278m (including compensation of employees, goods and services and capital)

• Additional funds from the NSF will be allocated once the DG considers proposals from the NSA on its work plan

THANK YOU

35