ANNUAL REPORT 2012/13 FINANCIAL YEAR - QCTO · 2019-09-08 · CTO Annual Report 2012/13 Financial Year 1 1. GENERAL INFORMATION REGISTERED NAME: Quality Council for Trades and Occupations

ANNUAL REPORT2012/13 FINANCIAL YEAR

QCTO Annual Report 2012/13 Financial Yearii

Contents

PART A: GENERAL INFORMATION1. GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12. LIST OF ABBREVIATIONS/ACRONYMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23. STRATEGIC OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 3.1 Vision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 3.2 Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 3.3 Values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 3.4 Strategic outcome orientated goals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54. LEGISLATIVE AND OTHER MANDATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65. ORGANISATIONAL STRUCTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86. FOREWORD BY THE CHAIRPERSON . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97. CHIEF EXECUTIVE OFFICER’S OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

PART B: PERFORMANCE INFORMATION1. STATEMENT OF RESPONSIBILITY FOR PERFORMANCE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132. AUDITOR’S REPORT: PREDETERMINED OBJECTIVES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133. OVERVIEW OF PUBLIC ENTITY’S PERFORMANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 3.1 Service delivery environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 3.2 Organisational environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 3.3 Key policy developments and legislative changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 3.4 Strategic outcome oriented goals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184. PERFORMANCE INFORMATION BY PROGRAMME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 4.1 Programme 1: Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 4.2 Programme2:OccupationalQualificationsManagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 355. SUMMARY OF FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 5.1 Revenue collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 5.2 Programme expenditure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 5.3 Capital investment, maintenance and asset management plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

QCTO Annual Report 2012/13 Financial Year iii

PART C: GOVERNANCE1. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 572. PORTFOLIO COMMITTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 573. EXECUTIVE AUTHORITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 574. THE ACCOUNTING AUTHORITY / BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 575. RISK MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 716. INTERNAL CONTROL UNIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 717. INTERNAL AUDIT AND AUDIT COMMITTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 718. COMPLIANCE WITH LAWS AND REGULATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 749. FRAUD AND CORRUPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7410. MINIMISING CONFLICT OF INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7411. CODE OF CONDUCT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7412. HEALTH SAFETY AND ENVIRONMENTAL ISSUES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7413. BOARD SECRETARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7414. SOCIAL RESPONSIBILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7515. MATERIALITY AND SIGNIFICANCE FRAMEWORK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7516. AUDIT COMMITTEE REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

PART D: HUMAN RESOURCE MANAGEMENT1. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 792. HUMAN RESOURCE OVERSIGHT STATISTICS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

PART E: FINANCIAL INFORMATION1. STATEMENT OF RESPONSIBILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 872. REPORT OF THE CHIEF EXECUTIVE OFFICER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 873. REPORT OF THE EXTERNAL AUDITOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 904. ANNUAL FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95

QCTO Annual Report 2012/13 Financial Year4

PART A: GENERAL INFORMATION

QCTO Annual Report 2012/13 Financial Year 1

1. GENERAL INFORMATION

REGISTERED NAME: Quality Council for Trades and Occupations

REGISTRATION NUMBER (if applicable): Not applicable

PHYSICAL ADDRESS: 3rd Floor, 123 Francis Baard Street Pretoria 0001

POSTAL ADDRESS: Private Bag X278 Pretoria 0001

TELEPHONE NUMBER/S: 027 12 312 5369

FAX NUMBER: 027 12 326 6526

EMAIL ADDRESS: [email protected]

WEBSITE ADDRESS: www.qcto.org.za

EXTERNAL AUDITORS: Auditor-General of South Africa PO Box 446 Pretoria 0001

BANKERS: ABSA, 2nd Floor, Lourie Place HillcrestOfficePark 177 Dyer Str Hillcrest 0083

BOARD SECRETARY: Ms Adri H Solomon, Director: Governance, Strategy, Secretariat Support and Appeals


2. LIST OF ABBREVIATIONS / ACRONYMSAGSA Auditor-General of South Africa

AQP Assessment Quality Partner

APPETD Association of Private Providers of Education, Training and Development

BBBEE BroadBasedBlackEconomicEmpowerment

CEO ChiefExecutiveOfficer

CD Chief Directorate

CFO ChiefFinancialOfficer

CHE Council on Higher Education

DG Director General

DHET Department of Higher Education and Training

DoL Department of Labour

DQP Development Quality Partner

ETQA Education and Training Quality Assurance body

FET Further Education and Training

FLC Foundational Learning Competence

FSCC Financial Sector Coalition Campaign

GENFETQA General and Further Education and Training Quality Assurance Act (No. 58 of 2001)

GFETQF GeneralandFurtherEducationandTrainingQualificationsSub-framework

IT Information Technology

ITC Information Technology and Communication

HELA Act Higher Education Laws Amendments Act (No. 26 of 2010)

HEQC Higher Education Quality Committee

HEQF HigherEducationQualificationsSub-framework

HR Human Resources

INDLELA Institute for the Development of Learnerships, Employment SkillsandLabourAssessments

MEC Member of Executive Council

MHET Minister of Higher Education and Training

MOA Memorandum of Agreement

MoL Minister of Labour

MSP Master Systems Plan

MTEF MediumTermExpenditureFramework

N/A Not applicable

NAMB National Artisan Moderating Body

NCV NationalCertificateVocational

NLRD National Learner Records Database

NOPF NationalOccupationalPathwaysFramework

NQF Act NationalQualificationsFrameworkAct(No.67of2008)

NSA NationalSkillsAuthority

NSDS NationalSkillsDevelopmentStrategy

OFO OrganisingFrameworkforOccupations


OQSF TradesandOccupationsQualificationsSub-framework(commonlyknownasOccupationalQualifications Sub-framework)

PFMA Public Finance Management Act

PPPFA PreferentialProcurementPolicyFrameworkAct

QA Quality Assurance

QC Quality Council

QCTO Quality Council for Trades and Occupations

QDF QualificationDevelopmentFacilitator

RPL Recognition of Prior Learning

SABPP South African Board for People Practices

SANACO South African National Apex Cooperatives

SAQA SouthAfricanQualificationsAuthority

SCM Supply Chain Management

SDA SkillsDevelopmentAct(No97of1998)

SETA Sector Education and Training Authority

SLA Service Level Agreement

TAU Technical Assistance Unit

TR Treasury Regulations

Umalusi Council for Quality Assurance in General and Further Education and Training


3. STRATEGIC OVERVIEW

3.1 Vision TheQualityCouncilforTradesandOccupations’(QCTO)visionisaccess,successandprogressionforallwhowantatrade,occupationorprofessionresultinginaskilled,productive and employable citizenry.

3.2 MissionThemissionistodevelopandqualityassureoccupationalqualificationsthatareresponsivetothelabourmarketneedsanddevelopmentalstateinitiatives.

3.3 Values

Values

Innovation and ExcellenceWerisetoopportunitiesandchallenges,wecontinuouslylearn,weareinnovativeandweconsistentlyproduceworkofdistinctionandfinequality,ontime,andinline

with our clients’ needs

Empowerment and RecognitionWeenablepeopletomakethingshappen,weencourageandsupportoneanotherwhenandwhereneeded,andwecelebratesuccessfulaccomplishmentofwork

Respect and DignityWevalueandshowconsiderationforallthepeopleweworkwith,treatoneanotherwithkindnessandthoughtfulness,andembraceinclusivity

Ethics and IntegrityWe embrace and practice a moral code of trustworthiness, honesty and truthfulness in everything we say and do, and we honour our promises and commitments

Ownership and AccountabilityWetakeownershipofourresponsibilitiesandweanswerforourdecisionsandactions

AuthenticityWeprotectthepublicbyissuingauthentic,qualityqualifications


3.4 Strategic outcome orientated goalsThe QCTO’s strategic outcome orientated goals in line with its Strategic Plan are the following:

Strategic outcomes oriented Goal 1

EffectivenessandEfficiency

Goal Statement TheQCTOisaneffectiveandefficientorganisation that is respected in the labourmarketbyemployers,learnersand providers

Indicator QCTOreceivesanunqualifiedauditreport annually


Access, success and progression

Goal Statement The QCTO provides South Africans with access to an occupational learning system that enables them, through lifelong learning , to succeed and progressinthelabourmarketandtocontribute to the country’s growth and development

Indicator Atleastafivepercentannualincreasein the number of learners registered on and successfully completing new occupationalqualifications,oncethesequalificationsareregisteredontheNQF.


An improved NQF landscape

Goal Statement The QCTO will actively contribute to an improved NQF landscape

Indicator Improved annual placement rate of learnersintoworkplaces,followingtheestablishment of a meaningful baseline figurefor2012/13.

Improved employer perception of qualityofoccupationalqualificationgraduates established by means of a survey on a tri-annual basis amongst those employers who have employed occupationalqualificationgraduates.


4. LEGISLATIVE AND OTHER MANDATESOn 31 December 2010 the QCTO was listed as a Schedule 3A Public Entity under the Public Finance Management Act, effective retrospectively from 1 April 2010 (GazetteNotice33900),aspersection26(G)(1)oftheSkillsDevelopmentAct(SDA).

4.1 Constitutional mandate The QCTO is not directly referenced in the Constitution. However there are two sections in the Bill of Rights to which its functions relate:

22. Freedom of trade, occupation and profession

Every citizen has the right to choose their trade, occupation or profession freely. The practice of a trade, occupation or profession may be regulated by law.

29. Education

1. Everyone has the right

a. to a basic education, including adult basic education; and

b. to further education, which the state, through reasonable measures, mustmakeprogressivelyavailableandaccessible.

Inensuringthequalityofoccupationalqualifications,whichincludequalificationsleading to trades, other occupations and professions, the QCTO contributes to Section 22.

IndevelopingandqualityassuringoccupationalqualificationsthataugmentthemenuofqualificationsinthefurthereducationandtrainingbandoftheNationalQualificationsFramework,italsocontributestoSection29(1)(b).

And in so far as its Foundational Learning programmes contribute to adult basic education, the QCTO also contributes to Section 29(1)(a).

4.2 Legislative mandate National Qualifications Framework Act and the Skills Development Act

The QCTO has been established in order to accommodate the unique learning requirements for building occupational competence. The QCTO is responsible for OccupationalQualificationsdevelopmentandmonitoring.

BoththeNationalQualificationsFrameworkAct,No67of2008andtheSkillsDevelopment Act, No 97 as amended in 2008 outline the functions of the QCTO. TheNQFAct,Section27,specifiesthattheQCTOshould:

• PerformitsfunctionssubjecttotheNQFActandtheSkillsDevelopmentAct

• Comply with any policy determined by the Minister in terms of section 8(2)(b);

• Consider the Minister’s guidelines contemplated in section 8(2)(c);• Collaborate with SAQA and other QCs in terms of the system

contemplated in section 13 (1)(f) (i);• Developandmanageitssub-framework,andmakerecommendations

thereon to the relevant Minister; and• AdvisetherelevantMinisteronmattersrelatingtoitssub-framework.

TheSkillsDevelopmentAct,inChapter6C(Sections26F–J),stipulatesthattheQCTO must:

• Advise the Minister on all matters of policy concerning occupational standardsandqualifications.

• PerformitsfunctionsintermsoftheSkillsDevelopmentActandtheNationalQualificationsFrameworkAct


• Subject to any policy issued by the Minister in terms of Section 26F: – Designanddevelopoccupationalstandardsandqualificationsand

submitthemtotheSouthAfricanQualificationsAuthorityforregistrationontheNationalQualificationsFramework;

– Establishandmaintainoccupationalstandardsandqualifications; – Ensurethequalityofoccupationalstandardsandqualificationsand

learninginandfortheworkplace; – PromotetheobjectivesoftheNationalQualificationsFramework; – LiaisewiththeNationalSkillsAuthorityonthesuitabilityandadequacy

ofoccupationalstandardsandqualificationsandonthequalityoflearninginandfortheworkplace;and

– Perform any other prescribed function.

Memorandum of Agreement (MOA) between the QCTO and Department of Higher Education and Training (DHET)

The QCTO and the DHET entered into a Memorandum of Agreement (MOA) duringthe2011/12financialyearwiththeunderstandingthatforthetransition,the QCTO will use the DHET’s infrastructure and systems to support it while becomingfullyoperational.TheMOAwasextendedforthe2012/13financialyear.

Important Regulations and Gazettes published

The following two documents published have both impacted on the QCTO: 4.2.5.1 DeterminationoftheSub-frameworksthatcomprisetheNational

QualificationFramework(Gazette36003publishedon 12 December 2012)

4.2.5.2 SETA Grant Regulations (Gazette 35940 published on 12 December 2012)

Public Finance Management Act

The QCTO also ensured compliance to the Public Finance Management Act, TreasuryRegulations,PreferentialProcurementPolicyFrameworkActandtheFrameworkforSupplyChainManagement.


5. ORGANISATIONAL STRUCTURE

Chief Director: Corporate Services

and CFOMs Ndivhu Madilonga

CEOMs G Joyce Mashabela

Accounting AuthorityQCTO Chairperson

Prof Peliwe P Lolwana

Chief Director: Occupational Qualifications Management

Mr Thomas X Lata

Director: Governance, Strategy, Secretariat Services

and AppealsMs Adri H Solomon


6. FOREWORD BY THE CHAIRPERSON

Prof Peliwe P LolwanaChairperson of the Council

It is an extremely great pleasure to provide the foreword for this year’s (2012/13) Annual Report based on the theme MOVING FORWORD for indeed the Quality Council for Trades and Occupations (QCTO) can be proud of the achievements made this year.

Theorganisation’sproductiveeffortstodevelopqualificationsthathavecurrencyandlegitimacyisastellarfeatureoftheQCTO.WorkingcloselywithDevelopmentQualityPartners(DQPs)andQualificationDevelopmentFacilitators(QDFs),everyeffort is made to ensure that the Community of Expert Practitioners, established foreachqualification,arepersonsofrelevanceandstandingintherespectiveindustry.

Standardisation of processes has helped the QCTO development team and their partnerstohavecommonalitywithinthesystemtherebymakingtheworkmorecongruent.

TheworkoftheQCTOcannotsucceedwithoutthosewillingtoworkinconjunctionwithustodeliveronourmandate.HappilythenumberofpartnersworkingwiththeQCTOhasgrownsignificantly.Toouroldpartners,suchastheSETAs,NAMB,QualificationDevelopmentFacilitators,andournewpartnersalike,pleaseknowthatIlookforwardtouswalkingthisjourneytogethertoproducehighlyrelevantoccupationalqualificationsthatareofferedbyacadreofverycredibleproviderswhere assessments are of an extremely high standard. In that way South African

occupationalqualificationswillstanduptoanytypeofscrutiny.Thusintheyearahead there will be greater focus on setting standards for quality assurance operations including the proposed establishment of a Monitoring and Evaluation Unit within the QCTO.

In closing, I reiterate the commitments made last year to which the QCTO continues to strive. The QCTO:

• will not operate as an island;• willworktobuildameaningfulpost-schoollearningsysteminSouth

Africa;• will strive to improve the recognition of learning acquired from

experience; and• �will strive to offer the college and adult learning systems meaningful help

in their quest to become ‘institutions of choice’ for learners.

Finally,asIdidlastyear,letmeassurethepublicthatthereisabodylookingafteritsinterest–theQualityCouncilforTradesandOccupations.

Yours sincerely

______________________Prof Peliwe P LolwanaChairpersonQuality Council for Trades and OccupationsDate: 31July2013


7. CHIEF EXECUTIVE OFFICER’S OVERVIEW

Ms G Joyce MashabelaChief Executive Officer

Greetings!

TheQCTOtakesprideinpresentingthe2012/13AnnualReport.

WorkingwithitspartnerstheQCTOhasmoved forward in establishing the TradesandOccupationsQualificationSub-framework,commonlyreferredtoastheOccupationalQualificationsSub-framework.WhileGazetteNo.36003–Determinationofthesub-frameworksthatcomprisetheNationalQualificationFramework(published14December2012)hasstimulateddebate,ithasalsobroughtforthusefuldefinitionsofthesub-frameworksassistingtheQCTOinmoving forwardwithitswork.

While the QCTO was established as a public entity on 1 April 2010 (see Gazette No. 33900) it had no policies of its own. Over the past 12 months the QCTO has started the processes and execution of plans that has enabled the creation of a number of QCTO policies and systems. The QCTO owes a debt of gratitude to the Department of Higher Education and Training (DHET) for entering into a MemorandumofAgreementthatallowedtheQCTOtopiggybackonitspoliciesand systems thereby enabling the QCTO to become operational. With the appointmentoftwoChiefDirectors(QualificationsManagementandCorporate

Services)byNovember2012,theQCTOexpectstomakeevengreaterstridesin the upcoming year towards policy and systems development. Indications are alreadyclearthatincreasedachievementcanandwilloccur,asforthefirsttimethe QCTO can boast that nearly 70% of its targets were met during the fourth quarter.

In the QCTO’s movement forward:

• TheQualifications,AssessmentandAccreditationaswellastheAuditandRiskCommitteesbecamefullyoperational;

• Qualificationsdevelopmentprocessesandprocedureshaveseenavastimprovementprovidingforstandardizedengagementwithstakeholders;

• 50qualificationsweresubmittedtotheQualificationsCommitteeforevaluation;

• 10assessmentsystemsattachedtovariousqualificationswerefoundtobe valid; and

• A provider accreditation system is in place.

Still the QCTO faces many challenges, not the least of which are capacity constraintswithregardstostaffandoffices.

MOVING FORWARDtheQCTOexpectstoincreasesignificantlythenumberofqualificationspresentedtoSAQAforregistrationandtoestablishaMonitoringandEvaluation Unit to provide stronger oversight within the system as a whole.

On behalf of the QCTO I extend our sincere appreciation to our many and varied partnersespeciallytheSETAs–whoseinsightintoindustryneedsshouldguidethesystem;thetrainingproviders;theQualificationDevelopmentFacilitators;theDevelopment Quality Partners and the Assessment Quality Partners.


ToallwesaythankyouandwithyourassistancewelookforwardtotheQCTO’sgrowth and expansion.

Sincerely,

_________________Ms G Joyce MashabelaChief Executive Officer Quality Council for Trades and OccupationsDate: 31July2013


PART B: PERFORMANCE INFORMATION


1. STATEMENT OF RESPONSIBILITY FOR PERFORMANCE INFORMATION

Statement of Responsibility for Performance Information for the year ended 31 March 2013

TheChiefExecutiveOfficerisresponsibleforthepreparationofthepublicentity’sperformance information and for the judgements made in this information.

TheChiefExecutiveOfficerisresponsibleforestablishing,andimplementingasystem of internal control designed to provide reasonable assurance as to the integrity and reliability of performance information.

Inmyopinion,theperformanceinformationfairlyreflectstheactualachievementsagainst planned objectives, indicators and targets as per the strategic and annual performanceplanofthepublicentityforthefinancialyearended31March2013.

The Quality Council for Trades and Occupations’ performance information for the year ended 31 March 2013 has been examined by the external auditors and their report is presented on page 90.

The performance information of the entity set out on page 20 to page 53 was approved by the Council.

-------------------------------Ms G Joyce MashabelaChief Executive OfficerDate:31July2013

2. AUDITOR’S REPORT: PREDETERMINED OBJECTIVES

The AGSA currently performs the necessary audit procedures on the performance information to provide reasonable assurance in the form of an audit conclusion. The audit conclusion on the performance against predetermined objectives is includedinthereporttomanagement,withmaterialfindingsbeingreportedunderthe Predetermined Objectives heading in the Report on other legal and regulatory requirements section of the auditor’s report.

Refer to page 90 of the Report of the Auditors Report, published as Part E: Financial Information.

3. OVERVIEW OF PUBLIC ENTITY’S PERFORMANCE

3.1 Service Delivery Environment Duringthe2012/13financialyearofoperation,theQCTOfunctionedmainlywithintwo programmes, namely:

• Programme 1: Administration• Programme2:OccupationalQualificationsManagement

Programme 1: Administration

Thisprogrammecoverstheworkoftwosegmentsoftheorganisation,namelyCorporate Services and Governance, Strategy, Secretariat Services and Appeals. The aim of this Programme is to ensure that the QCTO operates as an effective andefficientorganisation.

TheChiefExecutiveOfficeroftheQCTOassumeddutyon1April2012.For50%of the year, both Programmes functioned with no senior staff. During the second half of the year, the following senior management members were appointed:


• ChiefDirector:OccupationalQualificationsManagement• ChiefDirector:CorporateServicesandChiefFinancialOfficer• Director: Governance, Strategy, Secretariat Support and Appeals• ActingDirector:OccupationalQualificationsDevelopment• ActingDirector:OccupationalQualificationsAssessment

These appointments contributed substantially towards building a stable environment for the QCTO. Under the new leadership, Council agreed that in view of the delayed appointment of senior management, the QCTO’s Strategic Plan for 2012/13 to 2016/17 would be revised during 2013.

Key achievements:

The main outcomes of the Programme were the following:

• Successfully appointed sixteen (16) staff members in permanent positions and 12 interns.

• �Finalised the transfer of staff between the Department of Higher Education and Training (DHET) and the QCTO.

• �Effectively governed the entity to meet all compliance due dates in terms of the PFMA and Treasury Regulations.

• Submitted on time to the Department of Higher Education and Training (DHET) its published Strategic Plan, Annual Performance Plan for 2013/14 with budget implications for tabling in Parliament.

• �Professional secretariat services rendered to the Council, Executive Committee,AuditandRiskCommittee,FinanceCommitteeandsupporttotheQualificationsCommitteeaswellastheAssessmentandAccreditation Committee.

• AppointmentoftheQCTOAuditandRiskCommitteethatmetfromAugust 2012.

• �DevelopedaRiskManagementPolicy,RiskManagementFrameworkandStrategyaswellasaFraudPreventionPlan.TheOfficepreparedanewriskregisterandprogressagainstthemitigationofriskswaspresentedtotheAuditandRiskCommittee.

• �Obtained approval from Council for a Policy Register of internal policies thatwillbedevelopedinthenextfinancialyear.

• 12QCTOfinancialpoliciesweredevelopedandapprovedbyCouncil.• �Developed draft Supply Chain Management, Recruitment and Selection,

and Performance Management and Development System policies as well as the draft Code of Conduct.

Challenges:

The Programme experienced the following challenges which impacted on the entity as a whole:

• Delayed appointment of staff due to the fact that staff could only be appointed in permanent positions once the CEO assumed duty.

• Under-expenditureduetolackofstafftomanageprocurementprocessesas well as delays in procurement processes.

• Insufficientofficespaceastheorganisationhasgrown.• Full reliance on DHET policies, procedures, processes and systems

which caused several delays in procurement of goods and services and recruitment of staff as planned.


Significant external developments and impact

A very positive development during the year was the publication of the new SETA Grant Regulations by the Minister of Higher Education and Training which provides an income stream to the QCTO to fund quality assurance. The QCTO submittedarequestofaboutR14millionforthe2013/14financialyeartotheMinister for consideration in order to, inter alia, establish a professional monitoring and evaluation unit at the QCTO.

Programme 2: Occupational Qualifications Management

TheworkwithrespecttoProgramme2includesoccupationalqualificationdevelopment,designandreviewactivitiesandalsotasksrelatedtoqualityassurance,namelyaccreditation,assessmentandcertificationofoccupationalqualifications.

The purpose of this programme is to ensure availability and currency of authentic qualificationsandpartqualificationsfortradesandnon-tradeoccupationsontheOccupationalQualificationsSub-framework(OQSF);toensureaqualityassuranceenvironmentthatisfair,effectiveandefficientinrelationtoAccreditation,AssessmentandCertificationofqualificationsfortradesandnon-tradeoccupations;andtomanageaneffectiveandefficientengagementstrategyfortheadvancementofNQFobjectiveswithstakeholders.

Key achievements:

Intermsofoccupationalqualificationdevelopment,thefollowingweredevelopedandfinalisedforoperation:

• Development Quality Partners Guidelines• QualificationDevelopmentFacilitatorsGuide• QCTO Staff Manual• RefinementofQualificationEvaluationTools

Acumulativetotalof59qualificationswereevaluatedbytheQCTOinthis financialyear.

• NineofthesequalificationswerelegacyqualificationsthatweresubmittedusingtheSAQAqualificationsmodel.Thesequalificationswere recommended for registration with SAQA.

• Twoofthe50qualificationsdevelopedintheQCTOmethodologywere tabled to QCTO Council with a recommendation for registration; onlyonequalificationofthetwowasapprovedduringthisquarter,thisqualificationwassubmittedtoSAQAforregistration.Theotheronehaddocumentationoutstanding;thisqualificationwillbetabledagaintoCouncil in May 2013.

• Eighteenofthe50qualifications(developedintheQCTOmethodology)wereapprovedbytheQualificationsCommitteetobetakenforpubliccomments.TherestofthequalificationsweresentbacktoDevelopmentQualityPartnersforrectificationbecauseofthegapsthatwereidentified.OncefinalisedthesequalificationswillbetabledtoCouncilinMay2013.

The N4-N6 re-curriculation project roll out plan was approved. Initially 6 subjects willgothroughtheplannedprocess.Theresultofthisworkwillguidefurtherre-curriculation activities. Examiners, lecturers from FET Colleges and authors have been appointed to conduct this process. The project is expected to be completed bytheendofSeptember-October2013.AllstakeholdersvizExaminationUnit,Registration Unit, UMALUSI, SAQA, FET Colleges both public and private will be engaged with regards to this progress/ status of the project.

TheCouncilapprovedthreepolicies(Certification,AccreditationofSkillsDevelopment Providers and Accreditation of Assessment Centres) as well as the Criteria and Guidelines for Assessment Quality Partners (AQPs).The Criteria and GuidelinesforAQPsandprocessesforaccreditingSkillsDevelopmentProvidersare being implemented by the QCTO in processing AQP applications and in accreditingtheN4-N6skillsdevelopmentproviders.Thedraftprocessesforcertificationandforaccreditingassessmentcentreshavebeendeveloped.


The Assessment Committee approved 8 Assessment Quality Partner applications and additional four have been evaluated and are ready for submission to the Assessment Committee.

The QCTO continued to manage the currently registered occupational qualificationsqualityassuredbytheSETAsandProfessionalBodies.TheQCTO delegation of the quality assurance functions to the SETAs ran smoothly and a number of queries were satisfactorily processed although a high level of complaints received against the Services SETA have not yet been resolved.

Education and Training Quality Assurance (ETQA) Targeted Performance MonitoringvisitswereconductedbytheSouthAfricanQualificationsAuthority(SAQA) and the QCTO between the period May to August 2012. These visits resulted in 25 monitoring reports which the QCTO received from SAQA along with a copy of the Trends Report. The reports record the results of the ETQA Targeted Performance Monitoring and the areas of non-performance and/or underperformance were highlighted. SAQA recommended that the QCTO follow up with a request to SETAs to prepare development plans to address the identifiedareasofunderperformance.FeedbackonthereportswasgiventotheAssessment and Accreditation Committee at the 7 February 2013 meeting.

MembersoftheQualificationsManagementBranchparticipatedintheLearningandQualityAssuranceWorkshopsarrangedbytheSouthAfricanBoardforPeoplePractices(SABPP).TheworkshopswereofferednationallyandtheQCTOpresentations were well-received. The Branch also participated in the provincial workshopssponsoredbytheNationalSkillsAuthorityandtheinformationworkshopoftheAssociationofPrivateProvidersofEducation,TrainingandDevelopment (APPETD).

Challenges

Theteethingproblemsexperiencedinthequalificationsevaluationprocesshamperedtheachievementofthetargetsetfortheregistrationofqualificationsinthisfinancialyear.Itisexpectedthatasthesystemmaturesthechallengesexperienced will be resolved.

Stakeholderstookalongertimethanexpectedtounderstandtheevaluationsystem. This, in turn, impacted negatively on other parts of the system.

No targets have been met in the Research Sub-programme as the QCTO has insufficientcapacitytoperformthetasksrequiredtomeettheobjectives.ForthenewfinancialyeartheQCTOOfficehasidentifiedoneresearchprojectoncertificationforwhichaTermsofReferencetosecuretheservicesofaresearchertoperformtheworkhasbeencompleted.

ThedecisionsonNatedN4–N6programmesposedanadditionalchallengeinthat the QCTO had to manage a completely new area of responsibility. Thus the OccupationalQualificationsAssessmentDirectoratewasfloodedbyanumberof queries around the registration and accreditation of providers as private FET Colleges. Site visits to accredit private providers for N4-N6 programmes also put additional strain on an already short staffed team.

Significant external developments and impact

The Minister of Higher Education and Training published Government Gazette 36003onthedeterminationofthethreeSub-frameworks.ThisGazettehasimplicationsfortheQCTOtorevisethenomenclatureofitsqualificationsandhas determined that the QCTO focus on NQF Levels 1-6 until such time as the Minister considers additional advice from SAQA.

TheQCTOisamemberoftheTaskTeamestablishedbySAQAtoinvestigateinputs on the Determination.


TheSkillsDevelopmentAct,1998statesthatprovidersofferingqualificationsorpart–qualificationsregisteredatLevels1–10ontheOQSFarenotrequiredtoberegisteredasaprivateFETCollege.However,theseSkillsDevelopmentProviders must be accredited by the QCTO or any agency to which the QCTO has delegated its quality assurance functions. Certain of these functions including provider accreditation have been delegated by the QCTO to SETAs.TheJointCommuniquépublishedinSeptember2012outliningtheregistrationofprivate providers with the DHET and the accreditation of these providers with the QCTO had a major impact on the QCTO as unprocessed registration application forms in the DHET system were sent to the QCTO with the request to evaluate the documentation and to respond to the applicants. Many queries are still being received in response to the change in operation.

3.2 Organisational environment As mentioned above the CEO of the QCTO assumed duty on 1 April 2012. This broughtabouttheopportunitytoactivelystartfillingpermanentpositions.Theappointment of 16 permanent staff members up until 31 March 2013 with various posts also advertised at this date has increased productivity and staff morale. The appointment of senior management members, together with the leadership atCouncilhasbroughtaboutsignificantchangesintheQCTO’sstrategicthinkingwhichwillbereflectedintheQCTO’srevisedStrategicPlantobesubmittedbyCouncil to the Minister towards the end of 2013.

Special effort was made to introduce staff to strategic and operational planning aswellasriskmanagement.Itisbelievedthattheseeffortswillpayoffwhentherevised Strategic Plan and Annual Performance Plan for 2014/15 are prepared.

OfficeaccommodationisamajorchallengetotheQCTOandhashadanegativeimpactonthestaffaccommodatedinthecurrentpremises.Securityandparkingform part of these challenges as well. The QCTO has put plans in place to relocate to more suitable premises.

3.3 Key policy developments and legislative changes TwelveinternalfinancialpoliciesweredevelopedandapprovedbyCouncilduringthe year under review. The QCTO draft Code of Conduct and Ethics, draft SCM Policy, 2 Human Resource Policies which are draft Recruitment and Selection Policy, and the draft Performance Management System Policy were developed. These will be considered, reviewed by the relevant Committee structures within QCTO and submitted for approval by Council during 2013/14.

TheMinister’sdeterminationonthesub-frameworkspublishedinGovernmentGazette36003restrictstheQCTOtoLevel1–6contrarytotheinitialLevel1–Level 10 structure. SAQA has been designated the responsibility of researching theproposalandhassetupataskteamtoconsiderthematter.TheQCTOhasaseatonthetaskteam.

“TheGovernmentGazette35940onSETAGrantRegulationsmakesprovisionthat:“From 1 April 2013, a SETA will transfer as part of its administration costs as contemplated in sub-regulation (1) and approved in the annual SETA strategic plan, an amount that does not exceed 0,5% of the total levy paid by the employer to the QCTO for quality assurance functions as contemplated in section 26H of the Act, and the actual quantum of funds to be transferred will be determined by theMinisterby31Julyofeachyear.”


3.4 Strategic Outcome Oriented GoalsThe QCTO made the following progress in terms of its Strategic Outcome Orientated Goals:


EffectivenessandEfficiency

Goal Statement TheQCTOisaneffectiveandefficientorganisationthatisrespectedinthelabourmarketbyemployers,learnersandproviders

Indicator QCTOreceivesanunqualifiedauditreportannually

Progress TheQCTOreceivedanunqualifiedauditreportforthe2011/12financialyear.


Access, success and progression

Goal Statement The QCTO provides South Africans with access to an occupational learning system that enables them, through lifelong learning , to succeedandprogressinthelabourmarketandtocontributetothecountry’sgrowthanddevelopment

Indicator Atleastafivepercentannualincreaseinthenumberoflearnersregisteredonandsuccessfullycompletingnewoccupationalqualifications,oncethesequalificationsareregisteredontheNQF.

Progress TheFoundationalLearningCompetence(FLC)part-qualificationwasregisteredontheNQF.Acumulativetotalof59qualificationswereevaluatedbytheQCTOinthisfinancialyear.

•� NineofthesequalificationswerelegacyqualificationsthatweresubmittedusingtheSAQAqualificationsmodel.Thesequalificationswere recommended for registration with SAQA.

•� Twoofthe50qualificationsdevelopedintheQCTOmethodologyweretabledtoQCTOCouncilwitharecommendationforregistration;onlyonequalificationofthetwowasapprovedduringthisquarter,thisqualificationwassubmittedtoSAQAforregistration.Theotheronehaddocumentationoutstanding;thisqualificationwillbetabledagaintoCouncilinMay2013.

•� Eighteenofthe50qualifications(developedintheQCTOmethodology)wereapprovedbytheQualificationsCommitteetobetakenforpubliccomments.TherestofthequalificationsweresentbacktoDevelopmentQualityPartnersforrectificationbecauseofthegapsthatwereidentified.OncefinalisedthesequalificationswillbetabledtoCouncilinMay2013.


Progress The N4-N6 re-curriculation project roll out plan was approved. Initially 6 subjects will go through the planned process. The result of this workwillguidefurtherre-curriculationactivities.Examiners,lecturersfromFETCollegesandauthorshavebeenappointedtoconductthisprocess.TheprojectisexpectedtobecompletedbytheendofSeptember-October2013.AllstakeholdersvizExaminationUnit,Registration Unit, UMALUSI, SAQA, FET Colleges both public and private will be engaged with regards to this progress/ status of the project.


An improved NQF landscape

Goal Statement The QCTO will actively contribute to an improved NQF landscape

Indicator Improvedannualplacementrateoflearnersintoworkplaces,followingtheestablishmentofameaningfulbaselinefigurefor2012/13.

Improvedemployerperceptionofqualityofoccupationalqualificationgraduatesestablishedbymeansofasurveyonatri-annualbasisamongstthoseemployerswhohaveemployedoccupationalqualificationgraduates.

Progress 2245NQFregisteredqualificationshavebeenallocatedtotheOQSF.Statisticsappeartorevealthatthereisuptakeon747ofthesequalifications.

Twoofthe50qualificationsdevelopedintheQCTOmethodologyweretabledtoQCTOCouncilwitharecommendationforregistration;onlyonequalificationofthetwowasapproved,thisqualificationwassubmittedtoSAQAforregistration.Theotheronehaddocumentationoutstanding;thisqualificationwillbetabledagaintoCouncil.


4. PERFORMANCE INFORMATION BY PROGRAMME

4.1 Programme 1: AdministrationThe purpose of Programme 1: Administration is to ensure effective and efficientcorporateservices(includingfinancial,supplychain,humanresourcesmanagement, informational technology, communication and administration), corporate governance, strategic management, secretarial services to the QCTO (Council and selected committees) and management of appeals.

Thefollowingsub-programmesandstrategicobjectiveslinktoProgramme1:

Sub-Programme 1: CEO/Governance, Strategy, Secretariat Services and Appeals

Strategic objective 1.1.1: QCTO contributes continuously through written submissions, presentations and active participation to the collective efforts of SAQA, CHE and Umalusi towards the achievement of NQF objectives

Strategicobjective1.1.2:AStrategicRiskManagementStrategyisdeveloped,implementedandupdatedannuallytominimiseriskforthe QCTO

Strategicobjective1.1.3:Afiveyearstrategicplanandannualperformanceplan(APP) for the QCTO is developed

Strategic objective 1.1.4: A system to conduct quarterly and annual monitoring and reporting developed and implemented

StrategicObjective1.1.5:Supportservicesareeffectivelyandefficientlyprovidedto the Council

Sub-Programme 2: Financial Management

Strategicobjective1.2.1:PFMAandTreasuryRegulationscompliantfinancialmanagement policies, procedures and systems are developed and implemented

Strategic objective 1.2.2: PFMA, Treasury Regulations and PPPFA compliant supply chain management policies, procedures and systems developed and implemented

StrategicObjective1.2.3:Asustainablefinancialmodelandplanaredevelopedand implemented

Strategic Objective 1.2.4: Internal audit systems are developed and implemented

Sub-Programme 3: Human Resources Management

Strategic objective 1.3.1: QCTO human resources management capacities, policies, procedures and systems are developed and implemented

Strategic objective 1.3.2: A mechanism and systems to secure a conducive workingenvironmentattheQCTOisdevelopedandmaintained

Strategic objective 1.3.3: Systems and processes for staff development are designed and implemented

Sub-Programme 4: Information Technology

Strategic objective 1.4.1: Master systems plan and master technical plan developed during 2012/13

Strategic objective 1.4.2: QCTO ICT policies, procedures and systems are developed and implemented

Strategic objective 1.4.3: QCTO website developed, implemented and maintained during 2012/13

Sub-Programme 5: Marketing and Communication

Strategicobjective1.5.1:Amarketingandcommunicationstrategyisdevelopedand implemented

Strategicobjective1.5.2:AQCTOmarketingandcommunicationexhibitsandpublications developed and used


Sub-Programme 6: Administration

Strategic objective 1.6.1: Knowledge and records are effectively managed, and easilyaccessibletoallinternalandexternalstakeholders

Strategic objectives, performance indicators, planned targets and actual achievements

Strategic objectives

Note:Thestrategicobjectivesdirectlybelowwerereflectedinthe2011/12to2013/14 Strategic Plan. The 2012/13 to 2016/17 Strategic Plan and Annual PerformancePlan(APP)for2012/13tookonanewformatinlinewiththeFrameworkforStrategicPlansandAnnualPerformancePlans.Thestrategicobjectives in the 2012/13 APP differ from the strategic objectives set in the 2011/12 APP and are listed separately in the second table below. No targets were formulated against strategic objectives. Performance indicators were formulated againststrategicobjectives,whichthenhadtargetsreflectedagainstthelatter.


Programme Name 1: Corporate Services / Administration

Strategic objectives in 2011/12 to 2013/14 Strategic Plan

Actual Achievement 2011/12

Note: Information has been summarised

Continuously manage theachievement of the QCTOmandate and purpose.

ThemainoutcomeofthestrategicobjectivewastoachieveanunqualifiedauditreportandindoingsotheQCTOachievedthefollowing:• Effectively arranged Council, EXCO and committee meetings• Submitted on time to the DHET its strategic plan with budget implications• Set up mechanisms to monitor compliance with the Public Finance Management Act (PFMA) and Treasury Regulations• Signed a Memorandum of Agreement with the DHET to obtain all necessary support and access to policies and systems thereby ensuring

the QCTO’s compliance as a public entity with regards to ensuring the necessary controls and systems were in place.

Key performance indicators, planned targets and actual achievements

Programme 1: Administration in the QCTO performed as follows:

Performance Indicator Actual Achievement 2011/12

Planned Target2012/13

Actual Achievement2012/13

Deviation from planned target to Actual Achievement for 2012/13

Comment on deviations

Programme 1: Administration

Sub-programme: CEO/Governance, Strategy, Secretariat Services and Appeals

Strategic objective 1.1.1: QCTO contributes continuously through written submissions, presentations and active participation to the collective efforts of SAQA, CHE and Umalusi towards the achievement of NQF objectives

1.1.1.1 % attendance of SAQA, CHE, Umalusi Council meetings as well as CEO Committee and NQF Forum meetings by the QCTO CEO against agreed meeting schedules of different councils/committee

53% 60 % attendance by Q4

Target exceeded

81%

21% The CEO attended 13 out of the 16 meetings that relate to this indicator which resulted in 81% attendance







Programme 1: Administration (Continued)

Sub-programme: CEO/Governance, Strategy, Secretariat Services and Appeals (Continued)

Strategic objective 1.1.2:AStrategicRiskManagementStrategyisdeveloped,implementedandupdatedannuallytominimiseriskfortheQCTO

1.1.2.1.RiskManagementStrategy developed and implemented

Used DHETRiskManagement Strategy

Develop and implementriskmanagement strategy

Not achieved

Riskmanagementstrategydeveloped and agreed by AuditandRiskCommittee

Riskmanagementstrategy developed but not implemented yet

TheAuditandRiskCommittee concurred with theRiskManagementStrategy v2 tabled on 1 March 2013 and agreed that theQCTOfallundertheRiskManagement Strategy of DHET in view of the MOA, butQCTOwillstartworkingtowards the implementation ofitsownRiskManagementStrategy in 2013/14.

1.1.2.2QCTOrisksmonitoredonquarterly basis

Riskregisterupdated Oct 2011

Newriskregister developed and implemented

Achieved

Strategic objective 1.1.3:Afiveyearstrategicplanandannualperformanceplan(APP)fortheQCTOisdeveloped

1.1.3.1 Strategic plan & APP approved by Council and submitted to the Minister by 30 November annually

1 Strategic Plan for 2012/13 to 2016/17 and APP for 2012/13 approved by Minister on 5 March 2012

1 APP for 2013/14 approved by Minister

Not achieved

ThefinalAPP2013/14wassubmitted by the QCTO to theMinisterinJanuary2013and approved on 17 April 2013

QCTO achieved meeting DHET’s compliance due date and submitted published copies to Parliament as requested but DHET were not able to obtain Minister’s sign off in time

DHET has put a revised procedure in place for 2014/15 APP








Sub-programme: CEO/Governance, Strategy, Secretariat Services and Appeals (Continued)

Strategic objective 1.1.4: A system to conduct quarterly and annual monitoring and reporting developed and implemented

1.1.4.1 Adhere to Public Entities Calendar (wrt document submission) as the system used for quarterly and annual monitoring and reporting

Set of documents as described in the Public Entities Calendar submitted by required due dates

Set of documents as described in the Public Entities Calendar submitted by required due dates

Achieved

All compliance due dates met including submission of Quarterly Performance Report, Strategic Plan and APP 2013/14

Strategic objective 1.1.5:SupportservicesareeffectivelyandefficientlyprovidedtotheCouncil

1.1.5.1Numberofworkingdaysbefore Council meetings when documents are circulated to all Council

2 to 3 days 4 days Achieved

1.1.5.2 Number of Council meetingsheldduringthefinancialyear

7 ordinary meetings2workshops2 special meetings

4 meetings Achieved

5 meetings were held and 2 workshops

Sub-programme: Financial Management

Strategic objective1.2.1:PFMAandTreasuryRegulationscompliantfinancialmanagementpolicies,proceduresandsystemsaredevelopedandimplemented








Sub-programme: Financial Management (Continued)

1.2.1.1 Number of PFMA and Treasury Regulation compliant QCTOfinancialpolicies,procedures and systems developed and implemented in line with agreements from Council or QCTO Management Committee

1financialpolicy regarding remuneration of Council and committee members approved by Acting CEO

12 QCTO financialpoliciesapproved by Council

Draft plan developed to function independently from DHET in terms of financialmanagement

Achieved

The draft plan (Internal financialpoliciesandsystems) to assist the QCTO to function independently from DHET was developed.

12 Financial policies developed and approved. Listof9additionalfinancialpolicies to be developed in 2013/14 (Policies Register) was developed and approved by Council in its meeting held on 20 February 2013.

Accounting systems to be utilised for accrual system andfinancialstatementswereidentified,namelyPastel Evolution and CaseWare. Approval was granted to procure the systems. Systems to be implemented in 2013/14.









Strategic objective 1.2.2: PFMA, Treasury Regulations and PPPFA compliant supply chain management policies, procedures and systems developed and implemented

1.2.2.1 Number of PFMA and Treasury Regulation and PPPFA compliant QCTO supply chain management policies, procedures and systems developed and implemented in line with agreements from Council or QCTO Management Committee

0 Draft plan developed to function independently from DHET in terms of supply chain management

Achieved

The draft plan to function independently from DHET has been developed which consistsofalistofidentifiedSCM policies (Policies Register) which was developed and approved by Council in its meeting held on 20 February 2013.

Draft QCTO Supply Chain Policy developed. The draft policy will be considered for approval by Council in May 2013.

Strategic objective1.2.3:Asustainablefinancialmodelandplanaredevelopedandimplemented

1.2.3.1 % of income over and above ENE transfer

0% 0% No target set









Strategic objective 1.2.4: Internal audit systems are developed and implemented

1.2.4.1 Number of internal audit committee meetings to put systems in place and oversee internal audit

0 4 meetings Not achieved No meetings held. A formal committee has not been instituted.

Discussionstookplacecontinuously with DHET: Internal Audit during the quarter.

This Internal Audit Committee will be established once Internal Audit has been outsourced to a service provider.

Note: This indicator does not relate to the QCTO Audit and RiskCommitteewhichmet3times since its establishment in Aug 2012.








Sub-programme: Human Resource Management

Strategic objective 1.3.1: QCTO human resources management capacities, policies, procedures and systems are developed and implemented

1.3.1.1 Number of planned posts filled

7 appointed to commence 1 Apr 2012

34 posts Not achieved•6permanentpositionsfilled

18postsnotfilled •� TheCounciltookthedecision to cascade the appointment of staff. Due to the CEO only assuming duty as from 1 April 2012 and other senior management posts only beingfilledbythethirdquarter, this delayed the appointment of staff.

•� 5 DHET seconded staff did not accept the offers of transfer to QCTO and have revertedbacktoDHETinJanuary2013.Thesepositions could not be advertisedandfilledpriorto the completion of the process.

•� 6 positions advertised during March 2013.

•� The other outstanding positions advertised will befilledduring2013/14financialyear








Sub-programme: Human Resources Management (Continued)

1.3.1.2 Number of QCTO human resources management (HRM)policies, procedures and systems developed and implemented in line with agreements from Council or QCTO Management Committee

0 Draft plan developed to function independently from DHET ito human resources management

Achieved

The draft plan to function independently from DHET has been developed which consists ofalistof24identifiedHRpolicies (Policies Register) which was developed and approved by Council in its meeting held on 20 February 2013.

Although the development of HR policies as agreed with Council was to commence in 2013/14, 2 draft HR policies were developed, namely PMDS and Recruitment Policy. These will be submitted to the relevant committee for review subsequent to having obtained inputs from management and staff

1.3.1.3 % of staff undergoing performance assessment

100% 100% Not achieved

75% (out of the 16, 4 were outstanding) permanent staff complied as at 31 March 2013

66% of interns (out of the 12 interns 4 were outstanding by 31 March 2013)

25% outstanding Due to other urgent priorities some staff had not been able to fully comply with PMDS requirements by 31 March 2013.








Sub-programme: Human Resources Management (Continued)

Strategic objective1.3.2:AmechanismandsystemstosecureaconduciveworkingenvironmentattheQCTOisdevelopedandmaintained

1.3.2.1 % staff attrition rate not to be exceeded

No target 5% Achieved

There were no staff attritions during the year under review.

Strategic objective 1.3.3: Systems and processes for staff development are designed and implemented

1.3.3.1 % of new staff inducted and oriented


Staff recruited and appointed for QCTO through DHET were inducted and orientated on policies and procedures that governs QCTO.

Not all staff members appointed were inducted and orientated

QCTO did not have own designated HR unit and staff to facilitate orientation and induction of newly appointed staff members

QCTO relies fully on DHET HR capacity, induction and orientation schedules

QCTO’s own induction and orientation processes will be developed during 2013/14 financialyear

The position of AD: HR has been advertised and will be filledin2013/14.Thiswillallow planning, development and implementation of orientation and induction programmes

1.3.3.2 % staff attend capacity building sessions

More than 50% of staff was exposed

10% Achieved








Sub-programme: Information Technology

Strategic objective 1.4.1: Master systems plan and master technical plan developed during 2012/13

1.4.1.1 % completion of the master systems plan and master technical plan

No target 100% Not achieved

SpecificationandTORforthetenderforMSPfinalisedand ready for publishing. The processes have been put on hold pending the appointment of the Director ITwhoshouldinputandtakethe processes forward.

Inadequate ICT capacity within QCTO.

The IT director position will befilledduringthe1st quarter of 2013/14. Interviews were held on the 19th of March 2013.

Strategic objective 1.4.2: QCTO ICT policies, procedures and systems are developed and implemented

1.4.2.1 QCTO Information and Communication Technology(ICT) policies, procedures and systems developed

No target Draft plan developed to function independently from DHET ito ICT

Achieved

The draft plan to function independently from DHET has been developed which consists of a list of 3identifiedICTpolicies(Policies Register) which was developed and approved by Council in its meeting held on 20 February 2013.

1.4.2.2 QCTO Information and Communication Technology(ICT) policies, procedures and systems implemented

No target No target








Sub-programme: Information Technology (Continued)

Strategic objective 1.4.3: QCTO website developed, implemented and maintained during 2012/13

1.4.3.1 % establishment of the QCTO website


Status quo in relation to the development of the website from the service provider was as follows as at 31 March 2013:•� Home/Welcomepage–

100% complete

•� QCTODataLoader–80%complete

•� AboutUspage–100%complete

•� Eventspage–90%complete

•� FAQpage–95%complete

•� Contactuspage–95%complete

•� GeneralDocuments–95%complete

•� Find Occupations, Qualificationsandmorepage–70%complete

Delays were attributed to :

•� late submission of inputs to the website

•� delays in implementation of inputs by the appointed service provider








Sub-programme: Information Technology (Continued)

1.4.3.2 Number of visitors per month to the website

No target 1500 visitors Not achieved

Website not yet fully functional.

Delays in the development phases of the website.

Fasttrackthedevelopmentof the website to go live by thefirstquarterof2013/14

Sub-programme: Marketing and Communication

Strategic objective 1.5.1:Amarketingandcommunicationstrategyisdevelopedandimplemented

1.5.1.1Draftmarketingandcommunication strategy developed

No target No target Draftmarketingandcommunication strategy planned for development in 2013/14.

1.5.1.2Marketingandcommunication strategy implemented

No target No target Marketingandcommunication strategy will be implemented in 2013/14 subsequent to the development and approval of the strategy scheduled in 2013/14.








Sub-programme: Marketing and Communication (Continued)

Strategic objective 1.5.2:AQCTOmarketingandcommunicationexhibitsandpublicationsdevelopedandused

1.5.2.1 Prepare and print publications

3 publications printed and one Annual QCTO Newsletter and posters

One annual newsletter publishedQCTO diaries printed for marketingAnnual Report printed for marketingFinalise QCTO banners

Not achieved

QCTO diaries printed for marketing

Annual Report printed for marketing

Finalised QCTO banners

One annual newsletter published outstanding

Due to inadequate capacity, no newsletter was published in 2012/13.

A TOR has been drafted to appoint a Public Relations Agency to assist in this regard.

1.5.2.2 Number of events exhibited at

2 events 4 events Target exceeded

QCTOtookpartandexhibited at the SAPPB road shows (7) during March 2013, NSA road shows (2) and APPETD (1)

Sub-programme: Administration

Strategic objective 1.6.1:Knowledgeandrecordsareeffectivelymanaged,andeasilyaccessibletoallinternalandexternalstakeholders

1.6.1.1 Develop and implement a QCTO document management system

QCTO Project filingsysteminplace

QCTO Project filingsysteminplace

Achieved

Manualfillingsystemisinplace.


Strategy to overcome areas of under performance

Thefollowingstrategicinterventionswillbedeployedtocircumventunder–performance areas:

• Urgentfilingofcriticalpositionswithintheapprovedstructure• IntensifieddevelopmentandimplementationofQCTO’sinternalpolicies,

procedures, processes and systems• Establishment of QCTO’s database of suppliers and Bid Committee

structures• SourcingQCTO’sownofficespace

Changes to planned targets

InviewoffeedbackfromtheAuditor-Generalwithregardtothe2011/12AnnualPerformance Plan, the QCTO amended its 2012/13 Annual Performance Plan (APP) to improve on its performance indicators and targets.

After Council had approved the amended APP (addendum), it was submitted to the Minister on 30 November 2012. The Minister approved the amended APP and this Annual Report is based on the approved amended APP.

Linking performance with budgets

The budget and expenditure could not be presented per each programme. The QCTO relied on the DHET system to capture the budget and expenditure, which only permitted QCTO’s budget and expenditure to be captured as single programme.Thischallengewillcontinuetoexistforthe2013/14financialyearuntiltheQCTOhasfinalizedacquiringownsystemwhichwillbeusedforcapturing both the budget and expenditure information per programme and per each line item.

4.2. Programme 2: Occupational Qualifications ManagementThepurposeofProgramme2:OccupationalQualificationsManagementistoensureavailabilityandcurrencyofauthenticqualificationsandpartqualificationsfor trades and non-trade occupations on the OQSF; to ensure a quality assurance environmentthatisfair,effectiveandefficientinrelationtoAccreditation,AssessmentandCertificationofqualificationsfortradesandnon-tradeoccupations;andtomanageaneffectiveandefficientengagementstrategyfortheadvancementofNQFobjectiveswithstakeholders.

Thefollowingsub-programmesandstrategicobjectiveslinktoProgramme2:

Sub-Programme 1: Occupational Qualifications Development and Review

Strategicobjective2.1.1:Policiesforoccupationalqualificationsdevelopmentandreview are developed, operationalised and implemented by end 2012/13

Strategic objective 2.1.2: A user focused and user-friendly Trades and Occupationssub-frameworkisfinalisedandmaintained

Strategicobjective2.1.3:Occupationalqualificationsaredeveloped,reviewedandrecommended for registration

Strategic objective 2.1.4: A system for the ongoing monitoring, evaluation, quarterly and annual reporting of the development ofoccupationalqualificationsisdevelopedandimplemented


Sub-Programme 2: Occupational Qualifications, Quality assurance (Assessment, Provision, Accreditation, Certification, Foundational Learning, Monitoring and Evaluation)

Strategicobjective2.2.1:Policiesforoccupationalqualificationqualityassuranceare developed, operationalised and implemented by 2012/13

Strategic objective 2.2.2: An effective assessment and moderation system is developed and implemented by 2013/14

Strategicobjective2.2.3:Anefficientverificationandcertificationsystemisdeveloped and implemented by 2013/14

Strategic objective 2.2.4: A system for provider and programme accreditation, including for FLC, is developed and implemented by 2012/13

Strategicobjective2.2.5:Theoccupationalfoundationallearningpartqualificationis implemented by 2012/13

Strategicobjective2.2.6Historicallyregisteredqualificationsmanagedandphased out

Sub-Programme 3: Research and Pilot Projects

Strategic objective: 2.3.1 A research agenda and programme to contribute to the continuous improvement of the trades and occupational environment is developed by 2012/13 and implemented

Strategic objective: 2.3.2 Projects aimed at enhancing the design, provision, accreditationandcertification,includingrelatingtoprogression are developed and implemented annually

Strategic objectives, performance indicators, planned targets and actual achievements


Note:Thestrategicobjectivesdirectlybelowwerereflectedinthe2011/12to2013/14 Strategic Plan. The 2012/13 to 2016/17 Strategic Plan and Annual PerformancePlan(APP)for2012/13tookonanewformatinlinewiththeFrameworkforStrategicPlansandAnnualPerformancePlans.Thestrategicobjectives in the 2012/13 APP differ from the strategic objectives set in the 2011/12 APP and are listed separately in the second table below. No targets were formulated against strategic objectives. Performance indicators were formulated againststrategicobjectives,whichthenhadtargetsreflectedagainstthelatter.


Programme Name 2: Occupational Qualifications Management


Actual Achievement 2011/12Note: Information has been summarised

Establish a streamlined, user-focused and friendly occupational qualifications sub-frameworkthatis fully integrated into a single NQF

Policies were formulated and tested and resulted in the approval by Council of the following:• Policy on Delegation to Development Quality Partners and Assessment Quality Partners• Curriculum and Assessment Policy•QualificationDevelopmentFacilitatorPolicy.Furthermore,astep-by-stepguidetosigningaservicelevelagreementfordevelopmentofanoccupationalqualificationwasalsocompleted,printed and distributed.Through regular attendance at the various forums designed to create synergy within the sector, the QCTO was able to establish a joint project with Umalusi to review N1 to N3 courses.Furthermore,theQCTOsubmittedontimetotheMinisterofHigherEducationandTrainingitsproposedOccupationalQualification Sub-frameworkforpublicationforpubliccomment.

Produce relevant and credible occupational qualificationsthatlead to productive and sustainable employment

• Advertisements for priority staff positions (9) were placed in the newspapers•3prioritystaffmemberswereappointedby30March2012forthequalificationsdevelopmentunit•QualificationsCommitteeestablished• Relevant curriculum design and assessment policies developed•Developmentofasystemtocapturequalificationsunderway•Mechanismtoensurecontinuityofdeliveryofregisteredqualificationsdeveloped•ServiceLevelAgreementssignedwith17DevelopmentQualityPartnerstodeveloporimprove122qualifications•NewarchitectureforfoundationallearningfinalisedandapprovedbyCouncil• Provisional Service Level Agreement signed with National Artisan Moderation Body to serve as Assessment Quality Partner for trades.


Programme Name 2: Occupational Qualifications Management


Actual Achievement 2011/12Note: Information has been summarised

Streamline and enable the consistent, relevant and appropriate provision of occupational qualifications

• 3 priority staff members were appointed by 30 March 2012 for the assessment unit• Provisional Service Level Agreement signed with the National Artisan Moderation Body to serve as Assessment Quality Partner for trades

Streamline and enable credible assessment system for occupational qualifications

Achieve continuous improvement and best-practice design, provisional assessment and moderation of occupational qualifications

Thistooasabovewasanambitiousobjective,whichsawlittleornoprogressastheworkonqualificationsdevelopmentdidnotproceedasplanned.


Key performance indicators, planned targets and actual achievements

Programme 2: Occupational Qualifications Management in the QCTO performed as follows:

Programme / Sub-programme:

Performance Indicator

Actual Achievement

2011/12

Planned Target

2012/13


Deviation from planned target to Actual Achievement for

2012/13Comment on deviations

Programme Name 2: Occupational Qualification Management

Sub-programme: Occupational Qualifications Development and Review

Strategic objective 2.1.1Policiesforoccupationalqualificationsdevelopmentandreviewaredeveloped,operationalisedandimplementedbyend2012/13

2.1.1.1 Policies adopted by Council as per agreed list

No agreed list, 3 policies and revised Sub-frameworkapproved

Council to approve list of policies by Nov 2012

Achieved.

Council did approve a list of priority policies.

2.1.1.2 Completion of guidelines for the implementation of processes for each policy

33% 0 Target exceeded The following guideline documents were completed to enhance the implementation of QCTO policies:

1. For the Policy on Delegation, the following guideline documents were completed : a) QCTO Guide on

how to request for the development of occupationalqualifications

b) QCTO Guide for Development Quality Partners

Due to the urgency the assistance of GIZ was requested and were pressed against time in ordertoensureconsistencyinthequalificationdevelopment system




Actual Achievement

2011/12

Planned Target

2012/13




Programme Name 2: Occupational Qualification Management (Continued)

Sub-programme: Occupational Qualifications Development and Review (Continued)

2. For the Curriculum and Assessment Policy, the following guideline document was completed :QCTOGuideforQualificationsDevelopment Facilitators: How to facilitate the development of QCTO Occupational Qualifications.

3. Staff Manual for implementing the policies and processes.




Actual Achievement

2011/12

Planned Target

2012/13






Strategic objective 2.1.2:Auserfocusedanduser-friendlyTradesandOccupationssub-frameworkisfinalisedandmaintained

2.1.2.1 Turn-around time (weeks)fromfinalqualifica-tion received by QCTO to submission to SAQA

N/A 6weeks Not achieved

The6weeksturn-aroundtime as earlier envisaged was found to be far too short than the actual time required toevaluatequalifications.

The actual evaluation time-line implications were con-sideredbytheQualificationsCommittee resulting in a recommendation that was ta-bled and approved by Coun-cil on 16 November 2012.

The approved turnaround time requires a minimum of 90 days to evaluate occu-pationalqualification.Thisevaluation timeline includes the public comments process which the QCTO manages.

Qualificationsthatmeeteval-uation requirements are then tabled to Council for approv-al before they are submitted to SAQA with a recommen-dation for registration.

17weeks The variance is as a result of the environmental changesinthequalificationsevaluationprocess.The environmental changes necessitated the re-vision of the evaluation turnaround timelines. The timeline had to be revised based on the actual practical implications which were aligned to the requirements of the SAQA Policy Criteria for the RegistrationofQualificationsandPartQualifica-tions on the NQF.

The revised timelines were tabled by the Quali-ficationsCommitteetoCouncilon16November2012. The recommended timelines were ap-proved by Council for implementation.




Actual Achievement

2011/12

Planned Target

2012/13






2.1.2.2 Finalise Occupational QualificationsSub-framework

N/A Analyse public comments received on Occupational QualificationsSub-frameworkbyDec 2012

Present comments on Occupational QualificationsSub-frameworkto Council by end Feb 2012 (Typo in APP: should be 2013)

Achieved

Comments were submitted to Council on 23 November 2012.




Actual Achievement

2011/12

Planned Target

2012/13






Strategic objective 2.1.3:Occupationalqualificationsaredeveloped,reviewedandrecommendedforregistration

2.1.3.1 Number of new applications for new and improved qualificationsin the development process

122 140 applications

Achieved

The target of 140 applications was received. The application processing is at various phases. Stakeholderengagementsas part of the applications processingtakesalongtime.Not all applications result in the actual development of occupationalqualifications.




Actual Achievement

2011/12

Planned Target

2012/13






2.1.3.2 Number of qualificationsdeveloped and recommended to SAQA for registration

Agreed to recommend 1 qualification

60 qualifications

Not achieved

The QCTO received a total of59qualificationsthatweresubmitted for evaluation.

The outcome of the evaluation process can be summarized as follows:

Nine (9) of the abovementioned qualificationswerepipelinequalificationswhichwereon the system requiring attention as part of transitional arrangements. Thesequalificationswereevaluated and recommended for registration with SAQA.

59qualifications

Thequalityofqualificationssubmittedwasnotacceptable.

The evaluation process was submitted to the QualificationsCommitteeandapprovedafterthequalificationsweresubmitted.

Allqualificationswerereturnedtoberectifiedandcompliance




Actual Achievement

2011/12

Planned Target

2012/13






Two(2)qualificationswere from the newly developedqualification,suchaqualificationweretakenthroughtheentireevaluation process and were recommended for registration. Only 1 of these qualificationswasapprovedby Council on 20 February 2013. The remaining qualificationwillberetabledat the next council meeting.

Eighteen (18) newly developedqualificationswere subjected to the public comments process as part of the evaluation process. A recommendation for registration of these qualificationsisexpectedfortablingatCouncil’sfirstmeetinginthefinancialyear2013/2014.




Actual Achievement

2011/12

Planned Target

2012/13






The remainder of the qualificationstotalling30were found not to meet the evaluation requirements. ThesequalificationsweresentbacktotheDevelopmentQuality Partners for further attention.

Strategic objective 2.1.4:Asystemfortheongoingmonitoring,evaluation,quarterlyandannualreportingofthedevelopmentofoccupationalqualificationsisdeveloped and implemented

2.1.4.1 Number of monitoring and evaluation reports

1 25 reports Achieved

Various reports were received as part of monitoring and evaluation ofthequalificationsdevelopment processes.




Actual Achievement

2011/12

Planned Target

2012/13





Sub-programme: Occupational Qualifications, Quality assurance (Assessment, Provision, Accreditation, Certification, Foundational Learning, Monitoring and Evaluation)

Strategic objective 2.2.1:Policiesforoccupationalqualificationqualityassurancearedeveloped,operationalisedandimplementedby2012/13

2.2.1.1 Policies adopted by Council as per agreed list

No list1 policy on Delegation to AQPs approved

Council to approve list of policies by Nov 2012

Achieved

A list of policies was approved by the Council and the development continued as per the agreed list.

2.2.1.2 Completion of guidelines for implementation of policies and processes for each policy

0 N/A No target set

Draft criteria and guidelines for External Integrated Summative Assessment, Certification,AccreditationofSkillsDevelopmentProviders and Assessment Centres developed. Criteria and guidelines for AQPs were approved by Council.




Actual Achievement

2011/12

Planned Target

2012/13





Sub-programme: Occupational Qualifications, Quality assurance (Assessment, Provision, Accreditation, Certification, Foundational Learning, Monitoring and Evaluation) (Continued)

Strategic objective 2.2.2: An effective assessment and moderation system is developed and implemented by 2013/14

2.2.2.1 Assessment and moderation system developed and implemented

N/A Assessment and moderation system developed by March 2013

Not achieved

An assessment centre accreditation system in place. Policy approved by Council. Implementation will start next Term.

Assessment and Moderation Systems will be implemented in the next Financial year.

The processes and procedures are not in place. Theywillbefinalisedinthenextterm.

Processes and procedures have been developed and in the next Committee meeting they will be tabled for approval.

2.2.2.2 Number of AQPs assessment systems evaluated to be valid, reliable and fair

0 15 AQPs assessment systems

Not achieved

10 AQP applications were evaluated and their systems were in order and accordingly.

5 The delay mainly is due to the delay in the developmentofqualifications.SigningofSLAswithAQPsgoconcurrentlywithqualificationsdevelopment.




Actual Achievement

2011/12

Planned Target

2012/13






Strategic objective 2.2.3:Anefficientverificationandcertificationsystemisdevelopedandimplementedby2013/14

2.2.3.1 VerificationandCertificationsystem developed and implemented

N/A Verificationand Certificationsystem developed by March 2013

Not achieved.

TheArtisanCertificationSystemisstillintheofficesofDHET.QCTOOfficialsdoingArtisanCertificationinDHETOfficesissuingcertificatesundertheguidanceofDHETOfficials.

TheQCTOCertificationPolicy was approved by Council on 20 Feb 2013.

TheCertificationUnitoftheQCTOisexpectedtoberunningArtisanCertificationProcessesindependently under DHET guidance. This has partlyoccurredasQCTOofficialscandotheworkbutnotindependently.

FromthenexttermQCTOofficialswillleavetheDHETofficesandoccupyQCTOoffice.Theworkwill receive intensive monitoring to ensure QCTO canissueartisancertificatesindependently.

Certificationsforothertypes(N4toN6and“NQF/SETA”)qualificationshavebeendelegated.

Research to be conducted to determine the best systemtoaccommodateallcertificationneedswillbeexecutedinthenewfinancialyear.




Actual Achievement

2011/12

Planned Target

2012/13






2.2.3.2 Number of apprentices who completed external assessment

13 168 10 000 apprentices

Not achieved

2 443 apprentices

7 557 apprentices Section28RPLcandidatesinfluencedthetarget.There is growing interest in artisan training. NAMB provides an estimated number then it is set as a target.

2.2.3.3 Average time to issue certificatesafter assessment (weeks)

N/A 8weeks Achieved

Strategic objective 2.2.4: A system for provider and programme accreditation, including for FLC, is developed and implemented by 2012/13

2.2.4.1 A system for provider and programme accreditation is developed and implemented

N/A A system for provider and programme accreditation developed by March 2013

Achieved

A provider accreditation system is in place.

AccreditationofSkillsDevelopment Providers Policy approved by Council.




Actual Achievement

2011/12

Planned Target

2012/13






2.2.4.2 At least one provider accredited per new occupational qualificationregistered

0 60 providers Not achieved29

31 providers Thereisonlyonepart-qualificationregisteredthe Foundational Learning Competence (FLC) The 29 providers have been recommended for accreditation by the AQP.

Strategic objective 2.2.5:Theoccupationalfoundationallearningpartqualificationisimplementedby2012/13

2.2.5.1 Number of learners assessed

0 20 000 learners

Not achieved366

19 734 learners There was a technical delay in issuing Certificatesbutthematterhasbeenresolved.Thenumberhassignificanttlyimprovedto1200.

2.2.5.2 Number of learners passed the qualification

0 15 000 learners

Not achieved

192

14 808 Due to a technical delay the number of learners that passed the FLC is small. This has been rectifiedandthenumberhasimprovedto8000

Strategic objective 2.2.6Historicallyregisteredqualificationsmanagedandphasedout

2.2.6.1 Number of historically registered qualificationmanaged

1000 1000 historically registered qualifications

Target exceeded

2 245

1 245 InitiallythefigurewasderivedfromthequalificationsallocatedtoETQAsforqualityassurance purposes. Subsequently SAQA providedtheactualfiguresfromtheNLRD.




Actual Achievement

2011/12

Planned Target

2012/13






2.2.6.2 Number of reduced historically registered qualifications

0 200 reduced historically registered qualifications

Not achieved 200 A special team has been organised to review historicallyregisteredqualificationstodeterminewhich ones to de-register and which ones to convert.

Replacedqualificationsmustbeidentifiedthroughthequalificationsdevelopmentprocess.

Sub-programme: Research and Pilot Projects

Strategic objective 2.3.1 A research agenda and programme to contribute to the continuous improvement of the trades and occupational environment is developed by 2012/13 and implemented

2.3.1.1 Annual research agenda approved by Council

N/A Annual research agenda approved by Council in Q4 based on available resources

Not achieved The QCTO does not have the capacity.

QCTOismakinganefforttooutsourcesomeresearch activities and to build the capacity of one staff member to perform research duties.

2.3.1.2 Number of research projects completed

N/A 1 Not achieved 1 The QCTO does not have the capacity.

QCTOismakinganefforttooutsourcesomeresearch activities and to build the capacity of one staff member to perform research duties.




Actual Achievement

2011/12

Planned Target

2012/13

Actual Achievement

2012/13

Deviation from planned target to Actual

Achievement for 2012/13


Programme Name 2: Occupational Qualification Management

Sub-programme: Research and Pilot Projects (Continued)

Strategic objective 2.3.2Projectsaimedatenhancingthedesign,provision,accreditationandcertification,includingrelatingtoprogressionaredevelopedandimplemented annually

2.3.2.1 Number of projects developed and implemented

N/A 5 Not achieved

3

2 DiscussionshavetakenlongerthanexpectedwithvariousstakeholdersonEarlyChildhoodDevelopment,ontradequalificationsandonCommunity Developers.

TheQCTOwillurgestakeholderstooperatemore swiftly.

2.3.2.2 % completion of projects implemented

N/A 50% Not achieved

3 Projects have been identifiedandwillbeimplemented in the next term.

67% DiscussionshavetakenlongerthanexpectedwithvariousstakeholdersinEarlyChildhoodDevelopment,ontradequalificationsanonCommunity Developers.

TheQCTOwillurgestakeholderstooperatemore swiftly.


Strategy to overcome areas of under performance

The following strategy will be put in place to address areas of under performance:

A developed and implemented year planner should be strictly adhered to.

Activities and reporting to be aligned to the strategic objectives of the organisation.

Involvement and buy in from managers developing and reviewing the strategic plansonqualificationsdevelopmentandassessment.

Setrealistictargetsandtimelinesforqualificationsdevelopmentandassessment.

Administrative support and managerial capacity to be increased.

Developed processes and procedures to be implemented

Changes to planned targets

InviewoffeedbackfromtheAuditor-Generalwithregardtothe2011/12AnnualPerformance Plan, the QCTO amended its 2012/13 Annual Performance Plan (APP) to improve on its performance indicators and targets.

After Council had approved the amended APP (addendum), it was submitted to the Minister on 30 November 2012. The Minister approved the amended APP and this Annual Report is based on the approved amended APP.

Linking performance with budgets

The budget and expenditure could not be presented per each programme. The QCTO relied on the DHET system to capture the budget and expenditure, which only permitted QCTO’s budget and expenditure to be captured as single programme.Thischallengewillcontinuetoexistforthe2013/14financialyearuntiltheQCTOhasfinalizedacquiringownsystemwhichwillbeusedforcapturing both the budget and expenditure information per programme and per each line item.


5. SUMMARY OF FINANCIAL INFORMATION

5.1 Revenue Collection

2011/12 2012/13

Sources of revenue Estimate Actual Amount Collected

(Over)/Under Collection

Estimate Actual Amount Collected

(Over)/Under Collection

R’000 R’000 R’000 R’000 R’000 R’000

Government Grant 18,387 18,387 - 20,352 20,352 -

Finance Income 123 123 - 837 837

Total 18,510 18,510 - 21,189 21,189 -

5.2 Programme Expenditure

2011/12 2012/13

Programme Name Budget Actual Expenditure

(Over)/Under Expenditure

Budget Actual Expenditure

(Over)/Under Expenditure

R’000 R’000 R’000 R’000 R’000 R’000

QCTO 18,510 10,724 7,786 28,209 16,591 11,618

Total 18,510 10,724 7,786 28,209 16,591 11,618

5.3. Capital investment, maintenance and asset management planSection not applicable to the QCTO


PART C: GOVERNANCE


1. INTRODUCTIONCorporate governance embodies processes and systems by which public entities are directed, controlled and held to account. In addition to legislative requirements based on a public entity’s enabling legislation, and the Companies Act, corporate governance with regard to public entity’s is applied through the precepts of the Public Finance Management Act (PFMA) and run in tandem with the principles contained in the King’s Report on Corporate Governance.

Parliament, the Executive and the Accounting Authorities of the QCTO are responsible for corporate governance.

2. PORTFOLIO COMMITTEES The QCTO met with the Higher Education and Training Portfolio Committee on 23 May 2012. The QCTO was represented by the Chairperson of Council, Prof. PeliweLolwana,theChiefExecutiveOfficer,MsG.JoyceMashabela;andtheActingChiefFinancialOfficer,Mr.TheunsTredoux.

AstheQCTOisanewentitytheunderstandingofitsworkandhowitconductsitworkwerenotclear.TocompoundmattersboththeChairpersonandtheCEO were newly appointed to their positions. The meeting therefore focused onexplainingtheorganizationandtheneedtofirstbuildanorganization.Thusthemajorriskssuchaslackofsufficientstaffandthelackofanysystemswerehighlighted.

3. EXECUTIVE AUTHORITYThe QCTO submitted the 2011/12 Annual Report to the Minister which was tabled in Parliament on 26 September 2012.

The QCTO has also submitted all four of the QCTO’s Quarterly Performance Reportsforthe2012/13financialyeartotheMinisterviatheDirector-General:Higher Education and Training as required by the Department. Submission dates were as follows:

• Quarter1PerformanceReport:30July2012• Quarter 2 Performance Report: 30 October 2012• Quarter3PerformanceReport:28January2013• Quarter 4 Performance Report: 29 April 2013

No issue was raised by the Executive Authority.

4. THE ACCOUNTING AUTHORITY

IntroductionThe purpose of the QCTO is to establish, maintain and quality assure occupationalstandardsandqualificationsandlearninginandfortheworkplace.The QCTO is a third Quality Council (QC) in addition to the existing Council on Higher Education (CHE) and the General and Further Education and Training Quality Assurance Council (UMALUSI) to streamline standards setting and quality assurance

The QCTO must:

(a) promotetheobjectivesoftheNationalQualificationsFramework;(b) advisetheMinisteronmattersrelatingtotheoccupationalqualifications

frameworkandallmattersofpolicyconcerningoccupationalstandardsandqualifications;

(c) developandmanagetheoccupationalqualificationsframework;(d) comply with any policy issued by the Minister in terms of section 26F of

the SDA or determined by the Minister in terms of section 8(2)(b) of the NQF Act;

(e) comply with any written instruction issued by the Minister in terms of section 26H(5) of the SDA; and


(f) consider the Minister’s guidelines contemplated in section 8(2)(c) of the NQF Act.

The Council’s role and responsibilities are as follows:

(a) establishingandmaintainingoccupationalstandardsandqualifications;(b) thequalityassuranceofoccupationalstandardsandqualificationsand

learninginandfortheworkplace;(c) designinganddevelopingoccupationalstandardsandqualificationsand

submitting them to SAQA for registration on the NQF; and(d) ensuringthequalityofoccupationalstandardsandqualificationsand

learninginandfortheworkplace.

The QCTO must:

(a) liaise with the NSA on the suitability and adequacy of occupational standardsandqualificationsandonthequalityoflearninginandfortheworkplace;

(b) liaise with SAQA, Umalusi, the CHE and professional bodies responsible forestablishingstandardsandqualificationsorthequalityassuranceofstandardsandqualifications;

(c) with regard to level descriptors- (i) consider and agree to level descriptors as contemplated in section

13(1)(g)(i) of the NQF Act; and (ii) ensure that they remain current and appropriate; (d) withregardtoqualificationsfortheoccupationalqualificationsframework: (i)developandimplementpolicyandcriteria,takingintoaccountthe

policy and criteria contemplated in section 13(1)(h)(i) of the NQF Act forthedevelopment,registrationandpublicationofqualifications;

(ii)developandimplementpolicyandcriteria,takingintoaccountthepolicy and criteria contemplated in section 13(1)(h)(iii) of the NQF Act for assessment, recognition of prior learning and credit accumulation and transfer;

(iii)ensurethedevelopmentofsuchqualificationsorpartqualificationsas are necessary, which may include appropriate measures for the assessment of learning achievement; and

(iv)recommendqualificationsorpartqualificationstoSAQAforregistration;

(e) withregardtoqualityassurancewithintheoccupationalqualificationsframework:

(i) develop and implement policy for quality assurance; (ii) ensure the integrity and credibility of quality assurance; and (iii) ensure that such quality assurance as is necessary for the

occupationalqualificationsframeworkisundertaken;(f) with regard to information matters: (i) maintain a database of learner achievements and related matters; and (ii) submit such data in a format determined in consultation with SAQA for

recording on the national learners’ records database contemplated in section 13(1)(l) of the NQF Act; (i)

(g) with regard to other matters: (i) conduct or commission and publish research on issues of importance

to the development and implementation of the occupational qualificationsframework;and

(ii)informthepublicabouttheoccupationalqualificationsframework;(h) the QCTO must perform any other function: (i) required by the SDA or the NQF Act; or (ii) prescribed by regulation under the SDA or consistent with the NQF

Act that the Minister may determine; and (iii) the QCTO has all such powers as are necessary to enable it to

perform its functions.


Back row: (left to right) Ms. Pulane Masebe, Mr. Joe Samuels, Mr. Malesela Maleka, Ms. Joyce Mashabela, Mr. Thabo Mashongoane, Mr. Willy Matthiae

Front row: (left to right) Prof. Peliwe Lolwana, Dr. Marina le Grange, Ms. Stella Carthy

Not present: Dr. Mafu Rakometsi, Dr. Bheki Mahlobo, Mr. Ahmed Essop, Mr. Ecliff Tantsi, Mr. Thulane Mabuza


Board Charter

The requirements of the QCTO’s Constitution are provided for in the SDA. The second Constitution was approved by the Minister in 2011. The Council has commenced withadiscussiontoidentifyareaswhichneedstoberevised.Thiswillreceiveattentionduringthe2013/14financialyear.

Composition of the Council

Name Designation (in terms of the Public Entity Board structure)

Date appointed Date resigned

Qualifications Area of Expertise

Board Directorships

Other Committees

No. of Meetings attended (5 ordinary Council meetings held)

Prof. Peliwe Lolwana

Chairperson 26 Sept 2011 N/A Ph.D. Knowledge of education and training

Research

Policy development

Leadership and Management

Governance

National Research Foundation

Human Resources Development of SA Council

Metropolitan Momentum Insurance Foundation

Hotazel Manganese Mines Education Trust

University of Fort Hare Council

Executive Committee (Chairperson)

5





Board Directorships

Other Committees


Mr. Malesela Maleka

Deputy Chairperson

Nominated by NEDLAC to represent

organisations of community and development

interests

20Jan2010 N/A Professional Certificatein Public

Management

Member of the Commission on Employment Equity

MemberofBankSETA Board

Executive Committee

QualificationsCommittee (Chairperson)

5

Ms.GJoyceMashabela

CEO: QCTO 1 Apr 2012 N/A MA, MS, MBA Teaching

Management

Administration

SAQA

Council on Higher Education (CHE)

Umalusi

NationalSkillsAuthority

Executive Committee

Finance Committee

5

Mr.JoeSamuels CEO: SAQA 1 Mar 2012 N/A BSc Hons (Physiology),

MPhil (Adult Education)

Qualificationsframework,policy, adult education

Council on Higher Education, Umalusi, QCTO SAQA and NSA

None 2

3 apologies received





Board Directorships

Other Committees


Mr. Ahmed Essop

CEO: CHE 7 Dec 2010 N/A Honours degree in Sociology

Masters in International Development

Education

Higher Education

Umalusi

SAQA

QCTO

Old Mutual Education Trust

None 4

1 apology received

Dr. Mafu Rakometsi

CEO: Umalusi 20Jan2010 N/A Ph.D History of education

Curriculum, examinations and assessment

SAQA

QCTO

CHE

None 5

Vacant Executive Officer:NSA

Vacant since 1 Apr 2011

N/A





Board Directorships

Other Committees


Ms. Malebo Mogopodi


organised labour

12 Oct 2010 N/A ABETCertificateUNISA

ETP Practitioner

NQF 5

Adult learning and teaching Skillsdevelopment and training practices Community development Project Management

Merseta Board Basadi Badiri Primary Co-operative

3


Mr. Ecliff (Zwelitsha) Tantsi


organised labour

20Jan2010 N/A Matric, higher certificateinnonformal education

Adult Education and Training, labour relations

NUM National Executive,JBMarksBoard,MQA Board, ETBMTC Board

Executive Committee

Assessment and Accreditation Committee

2






Board Directorships

Other Committees


Ms. Stella Carthy

Nominated by NEDLAC to represent organised business

20Jan2010 N/A Qualifiedteacher -

primary school

IPM Diploma - HR Labour

Relations Training

Skills Development

NSA Executive Committee

Assessment and Accreditation Committee (Chairperson)

5

Mr. Willy Matthiae

Nominated by NEDLAC to represent organised business

20Jan2010 N/A National Technical Diploma

Mechanical Enginee-ring

Bcom. (Business

management & Industrial Psychology)

Management Development

Diploma

Engineering, Management, Project management, Training and Development

None Finance Committee (Chairperson)

QualificationsCommittee

5





Board Directorships

Other Committees


Mr. Thulane Mabuza


organisations of community and development

interests

20Jan2010 N/A Not available at time of printing

Not available at time of printing

Not available at time of printing

3


Dr.BhekiMahlobo

Appointed by the Minister to represent the interests of

public education and training

providers

20Jan2010 N/A Ph.D Curriculum Planning

None 1






Board Directorships

Other Committees


Dr. Marina le Grange

Member nominated

by the private providers of education

and training to represent the interests

of private education

and training providers which providers are

accredited providers in

terms of the SDA

20Jan2010 N/A BA

NHOD

B(ed)

M(ed)

D(ed)

Education

Management and Leadership

APPETD Board member

Director: Experiential Technologies

3


DHET: Vacant Member to represent the

interests of the state

Vacant:Jan2012





Board Directorships

Other Committees


Ms. Pulane Masebe

Member to represent the

interests of the state

25 Aug 2011 N/A B.Admin Honours degree

(Industrial Psychology)

Human Resource Development

Board Member in the Aerospace Centre of Excellence, University of Witwatersrand

QualificationsCommittee

5

Mr. Thabo Mashongoane

Co-opted expert from NSA (non

voting)

16 Nov 2011 MTech Business Administration

Skillsdevelopment

None N/A 2



Committees

Committee No. of meetings held No. of members Name of members No. of meetings attended

No. of apologies received

Executive Committee 4 6 members(5 members plus 1 vacant)

Prof Peliwe Lolwana (Chairperson)MrMaleselaMaleka(Deputy Chairperson of QCTO)MsJoyceMashabelaCEO)Ms Stella CarthyMr Zwelitsha (Ecliff) Tantsi

3

3

4

31

1

1

N/A

12

Finance Committee 2 5 members(3 members plus two vacancies)

Mr Willy Matthiae (Chairperson)Mr Gitesh MistryMsJoyceMashabela

2

22

N/A

N/AN/A

QualificationsCommittee 6 8 members(7 members plus one vacancy

MrMaleselaMaleka(Chairperson)Mr Willy MatthiaeMr Louis SchutteMs Nomathemba KubhekaDr Allyson LawlessMrMolokoMatlala(vacated end 2012/13)Prof Paul Nicholas German BeardMrs Kalawathie Bella Sattar

4

565

51

4

3

2

1N/A1

11

2

3


Committee No. of meetings held No. of members Name of members No. of meetings attended No. of apologies received

Assessment and Accreditation Committee

6 9 members Ms Stella Carthy(Chairperson)Mr Zwelitsha (Ecliff) TantsiDrTholsiaNaikerDr Linda van RyneveldMr Phineas SibanyoniMr Bogoshi TshehlaMs Margaret MachabaMs Mary PietersMrRodHarker(appointed end 2012)

4

1

6564351

2

3

N/A

N/A2

1N/A

AuditandRiskCommittee

3 5 members MrPaulSlack(Chairperson)Mr Kevin NaidooMr Theuns TredouxMs Cynthia ChueneMr Velile Kweyama (appointed from early 2013)

3

3210

N/A

N/A121


Remuneration of board members

The QCTO Council members are remunerated as per National Treasury rates. Reimbursement is in accordance to the Subsistence and Traveling Policy of the DHET. Members from the public sector do not receive remuneration.

Name * Total remuneration and S&T re-imbursements

Prof. Peliwe Lolwana(Chairperson) R46 976.00

Mr.MaleselaMaleka(DeputyChairperson) R26 810.00

Ms.JoyceMashabela(CEO) N/A

Mr.JoeSamuels N/A

Mr. Ahmed Essop N/A

Dr.MafuSRakometsi N/A

Ms. Malebo Mogopodi R15 814.00

Mr. Ecliff (Zwelitsha) Tantsi R19 820.50

Ms. Stella Carthy R24 995.75

Mr. Willy Edward Matthiae R21 136.07

Mr. Thulane Mabuza R22 427.00

Dr. Marina le Grange R465.00

Ms. Pulane Masebe N/A

* The above amounts constitute of remuneration, subsistence and travelling.


5. RISK MANAGEMENTIn view of the Memorandum of Agreement between the DHET and QCTO whereby the DHET provides all necessary policy, procedures, systems and support to the QCTO to function effectively as a public entity, the QCTO was assisted by the Department to procure a service provider to develop the following documents:

• RiskManagementPolicyapprovedbytheAuditandRiskCommitteeinMarch 2013 for recommendation to Council.

• RiskManagementFrameworkandStrategyagreedtobytheAuditandRiskCommitteetoserveasaplantostartimplementingriskmanagement in the QCTO.

ARiskManagerhasalsobeenappointedtodrivetheprocessintheQCTO.

TheQCTOconductedariskassessmenttowardstheendof2012andhasacomprehensiveriskregisterinplacethatwasupdatedagaininMarch2013.AreporttoindicatetheprogressagainstactionsidentifiedtomitigateriskswasalsopresentedtotheAuditandRiskCommittee.

AttheQCTOOfficeOperationalPlanningWorkshop,Managementhasalsobeenrequestedtoincludeactionstomitigaterisksintotheiroperationalplanssothatactions can be actively addressed.

6. INTERNAL CONTROL Management has focused on improving internal control through its partnership with the DHET in terms of the MOA with the latter as well as assistance from the Internal Audit Unit in DHET.

7. INTERNAL AUDIT AND AUDIT COMMITTEESKey activities and objectives of Internal Audit

The objective of the internal audit function is to provide independent, objective assurance designed to add value and improve the QCTO operations. It helps the QCTO accomplish its objectives by bringing a systematic, disciplined approach toevaluateandimprovetheeffectivenessofriskmanagement,control,andgovernance processes.


The main activities of Internal Audit are:• Compile three year rolling strategic and annual audit plan• Performing internal audit on the following systems:

➢Riskmanagementsystems: ➢ Control systems ➢ Governance systems• Report to management and the Audit Committee.

Audit work

The following activities as per audit plan were completed:

• Performance information• Compliance• Supply Chain Management• Income• Expenditure• Assets• RiskAssessment

Key activities and objectives of the Audit and Risk Committee

TheobjectiveoftheAuditandRiskCommitteeistoassiststheCouncilinfulfillingits responsibility for oversight of the quality and integrity of the accounting, auditing, and reporting practices of the QCTO, and such other duties as directed by the Council from time to time.

The main activities are:

• Considertheeffectivenessoftheinternalcontrolandriskmanagementsystem.

• Understand the scope of internal and external auditor’ review of internal controloverfinancialreporting,andobtainreportsonsignificantfindingsand recommendations together with management’s responses.

• ReviewtheQCTOriskprofileonanannualbasisandensuremanagementiseffectivelymanagingtherisks.

• ReviewtheMaterialityFrameworkandFraudPreventionPlanoftheQCTO.

• Review the effectiveness of the system for monitoring compliance with laws and regulations and the results of management’ investigation and follow-up (including disciplinary action) of any instances of non-compliance.

• Reviewtheadequacy,reliabilityandaccuracyofthefinancialinformationprovided to management and other users of such information and annually review the Annual Financial Statements.


ThetablebelowdisclosesrelevantinformationontheQCTOAuditandRiskCommitteemembers

Name Qualifications Internal or external

Date appointed Date Resigned No. of Meetings attended (3

meetings held)

Mr.PaulSlack(Chairperson) CA(SA)–1981

B.Com (Hons) (Financial Management

External 8June2012 NA 3

Mr. Kevin Naidoo Diploma: Internal Audit

Diploma: Computer Audit


Mr. Theuns Tredoux BCom (Hons) Acc

MBL (Unisa)


Ms. Cynthia Chuene B.Com (Financial Accounting)

B.Comm (Hons) (Accounting)


Mr. Velile Kweyama Senior Secondary Teachers Diploma (SSTD)

Bachelor of Accounting Sciences (BCompt)

External 31January2013 NA 0


8. COMPLIANCE WITH LAWS AND REGULATIONSUp to date the QCTO has ensured that it complied with all required documentation in terms of the PFMA and Treasury Regulations, as required by the DHET’s Compliance Calendar.

TheQCTOalsoattendsvariousotherCouncilandcommitteemeetingstokeepabreastoflawsandregulationsthatneedtobecompliedwith.TheQCTOworksclosely with the Department to ensure it is updated on the latest Regulations eg the SETA Grant Regulations and Government Gazette 36003 on the determination ofSub-frameworks.

The QCTO also ensured in-depth consultation on the draft Trade Test Regulations of the DHET and advised the Minister accordingly.

9. FRAUD AND CORRUPTION The QCTO is covered by the DHET’s fraud prevention plan in view of the MOA with DHET. However, the QCTO has ensured that its own fraud prevention plan wasdevelopedandagreedtobytheRiskandAuditCommittee.Thisplanwillbeanalysed in the year ahead to prepare an implementation plan of it for the QCTO.

The QCTO may use the whistle blowing policy of the DHET while the MOA exists.

NocasesoffraudhavebecomeknowntotheQCTOduringthelastyear.

10. MINIMISING CONFLICT OF INTERESTThe QCTO has permission from the DHET to use its bid committees which followsupplychainmanagementpolicy.Conflictofinteresthasbeendeclaredby a member of the Finance Committee that should a possibility exist for his organisationtoquoteortender,hewouldliketobeexcusedfromanysuchdiscussion in the Finance Committee.

11. CODE OF CONDUCT TheQCTO’sConstitutionmakesprovisionforaCodeofConductforCouncilandCommittee members. The QCTO staff is bound by the Code of Conduct of the DHET in terms of the MOA in place. A draft Code of Conduct has been developed in the QCTO for staff and will be processed to obtain the necessary approval.

12. HEALTH SAFETY AND ENVIRONMENTAL ISSUESTheQCTOissituatedintheofficesoftheDHET.Thebuildingisbeingupgradedto comply with the necessary Health Safety and Environmental issues. One major concernislimitedparkingandunfriendlyaccesstoparking.TheQCTOisintheprocesstoidentifyitsownoffices.

13. BOARD SECRETARY The QCTO does not fall under the Companies Act and therefore this section is not applicable to the QCTO (no Company Secretary). The QCTO does have a Director: Governance, Strategy, Secretariat Services and Appeals and staff that forms the secretariat to Council and most of its Committees.


14. SOCIAL RESPONSIBILITYNotapplicabletotheQCTOforthe2012/13financialyear.

15. MATERIALITY AND SIGNIFICANCE FRAMEWORKTheQCTOprepareditsMaterialityandSignificanceFrameworkwhichhasbeenapproved by Council and submitted to the Minister for concurrence.


16. AUDIT AND RISK COMMITTEE REPORTWearepleasedtopresentourreportforthefinancialyearended31March2013.

Audit and Risk Committee Responsibility

TheAuditandRiskCommitteereportsthatithascompliedwithitsresponsibilitiesarising from Section 51(1)(a)(ii) of the Public Finance Management Act and TreasuryRegulation27.1.TheAuditandRiskCommitteealsoreportsthatithasadoptedappropriateformaltermsofreferenceasitsAuditandRiskCommitteeCharter, has regulated its affairs in compliance with this charter and has discharged all its responsibilities as contained therein, except that we have not reviewed changes in accounting policies and practices.

The Effectiveness of Internal Control

OurreviewofthefindingsoftheInternalAuditwork,whichwasbasedontheriskassessmentsconductedinthepublicentityrevealedcertainweaknesses,whichwere then raised with the public entity.

Thefollowinginternalauditworkwascompletedduringtheyearunderreview:

• Performance information• Compliance• Supply Chain Management• Income• Expenditure• Assets• RiskAssessment

InternalAuditidentifiedsomeweaknessesthroughtheyearandthesewerereportedtotheAuditandRiskCommittee.TheseitemswereaddedtotheAuditAction Plan for continuous follow up by Internal Audit as they conduct their regular fieldwork

Asignificantareaofconcernwasthatsomeclaimswerenotpaidwithin30days.

In-Year Management and Quarterly Report

The QCTO has reported quarterly to the Treasury as is required by the PFMA.

TheAuditandRiskCommitteeissatisfiedwiththecontentandqualityofquarterlyreportspreparedandissuedbytheChiefExecutiveOfficeroftheQCTO.TheCommitteeconsideredtheriskregisterandensuredthatthisinformedtheInternalAuditPlan.Ongoingmonitoringoftheprogressagainsttheriskregisterwillbeconducted quarterly.

The Committee recommended that the QCTO appoints its own internal auditor which has been approved by Council.

Evaluation of Financial Statements

WehavereviewedtheannualfinancialstatementspreparedbytheQCTOandhave recommended them to Council for approval.


Auditor’s Report

We have reviewed the QCTO’s implementation plan for audit issues raised in the prioryearandwearesatisfiedthatthemattershavebeenadequatelyresolved.

TheAuditandRiskCommitteeconcursandacceptstheconclusionsoftheexternalauditorontheannualfinancialstatementsandisoftheopinionthattheauditedannualfinancialstatementsbeacceptedandreadtogetherwiththereportof the auditor.

_________________Mr Paul SlackChairperson of the Audit and Risk CommitteeQuality Council for Trades and OccupationsDate: 29July2013


PART D: HUMAN RESOURCE MANAGEMENT


1. INTRODUCTION Overview of HR matters at the public entity

QCTOapprovedstructureprovidesfor46positions.Only16couldbefilledduring2012/13. Due to the CEO only assuming duty as from 1 April 2012 and other seniormanagementpostsonlybeingfilledbythethirdquarter,thisdelayedtheappointment of staff.

Policies, procedures and systems used for the year under review were those of DHET since the QCTO had not yet fully established its own HR structures, functions, HR systems, and HR policies

Set HR priorities for the year under review and the impact of these priorities

ThemainHRfocuswastocapacitatetheentitybyfillingofpositions,moreespeciallyatmanagementlevelto.Althoughnotallpositionswerefilledasplanned an attempt was made in that appointment of critical management positionswasfinalized.SometargetsintheAPPwerenotachievedasaresultoflatefillingofpositions

Workforce planning framework and key strategies to attract and recruit a skilled and capable workforce

Inthedrivetoattractandretainskilledlabourforce,theQCTOhasaspartofitsplanstodevelopaPolicyonRemuneration,ScareSkillsandRetentionPolicy.The policy will be developed during 2013/14. The development of the said policy is intended to promote, improve and ensure good practice in all aspects of the scarceskillsretentionprocesswithintheQCTO.Inadditionitwillaimtoenablethe QCTO to attract and retain high quality professional candidates regardless of marketordemographicconditions.

EmployeeperformancemanagementframeworkQCTOdidnothaveitsownPerformancemanagementpolicy,howevertheframeworkofDHETwasutilizedtoguide planning and management of performance.

Employee wellness programmes

NoemployeeprogrammeswereplannedandimplementedspecificallyforQCTOduring the year other than those of the DHET.

Policy development Achievements

Alistcontaining24identifiedHRpoliciesplannedfordevelopmentin2013/14wasapproved by Council in February 2013.

Although development of policies was to commence in 2013/14, by March 2013, two draft HR policies, the Recruitment and Section policy and the Performance Management policy were already developed. These will be submitted for review by the relevant committees after inputs by management and staff. Approval by Council is expected during the 2nd quarter of 2013/14.

The draft Code of Conduct for QCTO staff was developed, endorsed by management and circulated to staff. Review by the relevant committees and approvalbyCouncilwilltakeplaceduringthe1stquarterof2013/14.

Challenges faced by the public entity

The QCTO is severely under capacitated. It has functioned with only 16 staff membersduringthefinancialyearunderreview.Recruitmentandfillingofpositionswillbeexpeditedinthe2013/14financialyear.


Future HR plans /goals

QCTO’s intention going forward is to establish a fully functional HR unit that is independent of DHET. This will encompass own HR policies, administration and management of payroll as well as implementation of QCTO HR programmes.

2. HUMAN RESOURCE OVERSIGHT STATISTICS Personnel Cost by programme

Programme Total Expenditure for the entity (R’000)

Personnel Expenditure (R’000)

Personnel exp. as a % of total exp. (R’000)

No. of employees Average personnel cost per employee (R’000)

QCTO R16,591 R9,184 55% 16 574

Personnel cost by salary band

Level Personnel Expenditure (R’000)

% of personnel exp. to total personnel cost (R’000)

No. of employees Average personnel cost per employee (R’000)

Top Management R1,045 11% 1 R1,045

Senior Management R1,096 12% 3 R362

Professionalqualified R4,407 48% 8 R551

Skilled R2,636 29% 4 R659

Semi-skilled -

Unskilled -

TOTAL R9,184 100% 16 R574


Performance RewardsNoperformancebonuseswerepaidasyetfortheyearunderreview.Finalisationofappraisalswilltakeplaceinthe1stquarterof2013/14.Aprovisionhasbeenraisedinthefinancialsfortheestimatedcostsofperformancerewardstobepaid.

Training Costs

Directorate/ Business Unit

Personnel Expenditure (R’000)

Training Expenditure(R’000)

Training Expenditure as a % of Personnel Cost

No. of employees trained

Avg training cost per employee

QCTO R9,184 R62 0% 3 R21

Employment and vacancies

Programme 2011/12 No. of Employees

2011/12 Approved Posts

2012/13No. of Employees

2012/13 Vacancies

% of vacancies

QCTO 0 46 16 30 65%

Programme 2011/12 No. of Employees

2012/13 Approved Posts

2012/13No. of Employees

2012/13 Vacancies

% of vacancies

Top Management 0 1 1 - -

Senior Management 0 7 3 4 57%

Professional qualified 0 16 8 8 50%

Skilled 0 14 4 10 71%

Semi-skilled - 7 - 7 100%

Unskilled - 1 - 1 100%

TOTAL 0 46 16 30

IntermsofthetargetssetintheAPP2013/14,theQCTOintendsfillingall30vacantpositionsduring2013/14financialyear.Thepositionshavebeenbudgetedaccordingly.


Employment changes

Provideinformationonchangesinemploymentoverthefinancialyear.Turnoverratesprovideanindicationoftrendsinemploymentprofileofthepublicentity.

Salary Band Employment at beginning of period Appointments Terminations Employment at

end of the period

Top Management 1 - - 1

Senior Management - 3 - 3

Professional qualified 6 2 - 8

Skilled - 4 - 4

Semi-skilled - - - -

Unskilled - - - -

Total 7 9 - 16


Labour Relations: Misconduct and disciplinary action

QCTO did not have misconduct cases and disciplinary actions for the year under review.

Equity Target and Employment Equity Status

Levels MALE

African Coloured Indian White

Current Target Current Target Current Target Current Target

Top Management - - - - - - - -

Senior Management 1 - - - - - - -

Professionalqualified 3 - - - - - - -

Skilled 3 - - - - - - -

Semi-skilled

Unskilled

TOTAL 7 - - - - - - -


Levels FEMALE

AFRICAN COLOURED INDIAN WHITE

Current Target Current Target Current Target Current Target

Top Management 1 - - - - - - -

Senior Management 1 - - - - - 1 -

Professionalqualified 3 - - - - - 1 -

Skilled 2 - - - - - - -

Semi-skilled

Unskilled

TOTAL 7 - - - - - 2 -


Levels Disabled Staff

Male Female

Current Target Current Target

Top Management - - - -

Senior Management - - - -

Professionalqualified - - - -

Skilled - - - -

Semi-skilled - - - -

Unskilled - - - -

TOTAL - - - -


PART E: FINANCIAL INFORMATION


1. STATEMENT OF RESPONSIBILITYStatement of Responsibility for the Annual Financial Statements for the year ended 31 March 2013

The Accounting Authority is responsible for the preparation of the public entity’s annualfinancialstatementsandforthejudgementsmadeinthisinformation.

The Accounting Authority is responsible for establishing, and implementing a system of internal control designed to provide reasonable assurance as to the integrityandreliabilityoftheannualfinancialstatements.

Inmyopinion,thefinancialstatementsfairlyreflecttheoperationsofthepublicentityforthefinancialyearended31March2013.

The external auditors are engaged to express an independent opinion on the AFS of the public entity.

The QCTO Annual Financial Statements for the year ended 31 March 2013 have been audited by the external auditors and their report is presented on page 90.

The Annual Financial Statements of the public entity set out on page 97 to page 156 have been approved.

_________________ _________________Ms G Joyce Mashabela Prof Peliwe P LolwanaChief Executive Officer Chairperson Of The Council

Quality Council for Trades Quality Council for Trades and Occupations Occupations

Date: 31July2013 Date: 31July2013

2. REPORT OF THE CHIEF EXECUTIVE OFFICER

General financial review of the QCTOThe QCTO currently generates its revenue mainly from transfers from the Department of Higher Education and Training. Transfers received have increased from R18, 387 million in 2011/12 to R20, 352 million in 2012/13. Over the medium term, the average growth in transfers received is expected to be at an average of approximately 1% each year.

The pronouncement of the SETA Grant Regulations by the Minister in December 2012willresultinadditionalfundsflowingtotheQCTOintheforthcomingfinancialyear 2013/14 and possibly in other years for quality assurance functions. The said RegulationsprovidesthattheMinistershallmakeadeterminationeachJulyofanamount not exceeding 0.05%. The QCTO has submitted for consideration by the Minister a request for the amount to the tune of R14, 047 million.

Spending trends of the QCTOOf the R20, 352 million transfer from the Department, R16, 591 million was spent for the year under review (2012/13). Expenditure has grown during 2012/13 by almost 55% and is expected to continue to increase in 2013/14 and 2014/15 to R24 million, at an average annual rate of 20.8 per cent.

QCTO’s spending focus over the medium term will be on attaining full functionality by appointing staff, and developing and implementing policy, systems and procedures to give effect to the mandate of the Council.


Capacity constraints and challenges facing the QCTOWithsuchabroadmandate,theQCTOhashoweverfunctionedwithlackofcapacity more especially in relation to staff capacity. The CEO was appointed in April 2012 with other senior managers only appointed in the third quarter of thefinancialyear.Theapprovedstartuporganogramprovidesfor46positionwhereasonlyatotalof16postswerefilledduring2012/13.

Complete reliance on DHET systems, processes, policies and procedures have hindered the QCTO to spend its 2012/13 budget as planned.

Discontinued activities / activities to be discontinuedThere were no activities discontinued during the year under review and no activitieswillbediscontinuedintheforthcomingfinancialyear.

New or proposed activitiesDuring the year under review no new activities were introduced, however it is expected that in 2013/14 the QCTO upon receipt of the SETA grant as would be determined by the Minister, will intensify the Quality Assurance activities.

Requests for roll over of fundsTheQCTOappliedfortheretentionofthenetsurplusforthe2013financialyear(R6, 042 million) in terms of section 53 (3) of the PFMA from National Treasury duringthefirstquarterofthe2013/14financialyear.Thisapprovalhasnotyetbeen granted by National Treasury.

Supply chain management• No unsolicited bid proposals were concluded during the year

• SCM processes and systems in place

DuetolackofcapacityQCTOhasbeenfullyreliantonDHETSCMpolicies,processes and systems. The MOA was engaged with DHET to assist QCTO with SCM functions including utilisation of Bid committees.

• Challenges experienced and how resolved There were several delays in QCTO’s planned procurement of goods and services as a result of reliance on DHET hence the budget was under spent. The plan to wean from DHET will reach its climax during 2013/14. This will encompass development of several policies, processes and systems in the areas of Finance, SCM, IT and HR. The development of QCTO’s own SCM policy was already completed by 31 March 2013. It is envisaged that approval will be granted by Council during the 1st quarter of 2013/14. Once approved by Council, the draft SCM will enable establishment of QCTO’s own database of suppliers, bid committees and SCM structures.

• Attention is drawn to the AGSA’s Audit Report with respect to the statement of irregular expenditure. The irregular expenditure was in relation to one service provider which was disclosed in the Annual Financial Statements of 2012/13. The irregularity was presented to Council and condoned.

Audit report matters in the previous year and how it was be addressedThefollowinginformationreflectsthefindingsofthe2011/12financialyear:

• Findings on pre-determined objectives were that reported targets were not included in the strategic and annual plan for 2011/12, no planned performancetargetswerespecifiedintheapprovedstrategicplanandannual performance plan and performance indicators were not well defined.


Toaddressthefindingsandensurethattheissuesarenotrepeated,theQCTOusedthetemplatesprovidedintheFrameworkforStrategicandOperational Plans. The QCTO also reviewed its Annual Performance Plan for 2012/13’s performance indicators and targets of which the addendum was approved by the Minister.

• Finding on Annual Financial Statements

Thefinancialstatementssubmittedforauditingwerenotpreparedinallmaterial respects in accordance with the requirements of section 55(1)(b) of the PFMA. Material misstatements of current liabilities and expenditure identifiedbytheauditorsweresubsequentlycorrected,resultinginthefinancialstatementsreceivinganunqualifiedauditopinion.

• Internal Audit

Internal Audit were found not be have been as effective during the 2011/12financialyear.ThissituationoccurredduetothefactthattheQCTO was dependant on the Internal Audit Unit of DHET, which was also understaffed. To correct the problem, the QCTO has agreed to source its own Internal Auditor which is in process.

Outlook/ Plans for the future to address financial challengesAmongst the main causes for under spending is full dependency on DHET. The plan to wean from DHET will reach its climax during 2013/14. This will encompass development of several policies, processes and systems in the areas of Finance, SCM, IT and HR.

Once approved by Council, the draft SCM will enable establishment of QCTO’s own database of suppliers, bid committees and SCM structures. Capacity will be enhancedthroughfillingofvacantpositions.Sourcingofownofficepremisesforthe QCTO will be completed during 2013/14.

Events after the reporting dateThere are no events after reporting date.

Economic Viability The QCTO is mainly dependent on the Department of Higher Education and Training for continued funding of operations. Department of Higher Education and Training has neither the intention nor the need to liquidate or curtail materially the scale of the QCTO’s activities, hence management believes with certainty that the QCTOisfinanciallysustainableandwillcontinuetoexistasagoingconcerninthe forthcoming years.

_________________

Ms G Joyce MashabelaChief Executive OfficerQuality Council for Trades and OccupationsDate: 31July2013


3. REPORT OF THE EXTERNAL AUDITOR

REPORT OF THE AUDITOR-GENERAL TO PARLIAMENT ON THE QUALITY COUNCIL FOR TRADES AND OCCUPATIONS

REPORT ON THE FINANCIAL STATEMENTS

Introduction 1. IhaveauditedthefinancialstatementsoftheQualityCouncilforTrades

and Occupations (QCTO) set out on pages 97 to 156, which comprise the statementoffinancialpositionasat31March2013,thestatementoffinancialperformance,statementofchangesinnetassets,thecashflowstatementandthe statement of comparison of budget against actual amounts for the year thenended,andthenotes,comprisingasummaryofsignificantaccountingpolicies and other explanatory information.

Accounting authority’s responsibility for the financial statements2. The accounting authority is responsible for the preparation and fair

presentationofthesefinancialstatementsinaccordancewithSouthAfricanStandards of Generally Recognised Accounting Practice (SA Standards of GRAP) and the requirements of the Public Finance Management Act of South Africa, 1999 (Act No. 1 of 1999) (PFMA), and for such internal control as the accounting authority determines is necessary to enable the preparation of financialstatementsthatarefreefrommaterialmisstatement,whetherduetofraud or error.

Auditor-General’s responsibility3. Myresponsibilityistoexpressanopiniononthesefinancialstatementsbased

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 toobtainreasonableassuranceaboutwhetherthefinancialstatementsarefree from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amountsanddisclosuresinthefinancialstatements.Theproceduresselecteddependontheauditor’sjudgement,includingtheassessmentoftherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror.Inmakingthoseriskassessments,theauditorconsidersinternalcontrolrelevanttotheentity’spreparationofthefinancialstatementsinorderto 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 financialstatements.

5. IbelievethattheauditevidenceIhaveobtainedissufficientandappropriateto provide a basis for my audit opinion.

Opinion6. Inmyopinion,thefinancialstatementspresentfairly,inallmaterialrespects,

thefinancialpositionofQCTOasat31March2013,anditsfinancialperformance,cashflowsandcomparisonofbudgetagainstactualamountsfor the year then ended in accordance with SA Standards of GRAP and the requirements of the PFMA.


Report on other legal and regulatory requirements 7. In accordance with the PAA and the General Notice issued in terms thereof,

Ireportthefollowingfindingsrelevanttoperformanceagainstpredeterminedobjectives, 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 to 53 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’s 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 aremeasurable(i.e.welldefined,verifiable,specific,measurableandtimebound)andrelevantasrequiredbytheNationalTreasuryFrameworkformanaging programme performance information.

The reliability of the information in respect of the selected objectives is assessedtodeterminewhetheritadequatelyreflectsthefacts(i.e.whetheritis valid, accurate and complete).

10.Thematerialfindingsareasfollows:

Reliability of selected programmesProgramme 2:Occupationalqualificationmanagement

11. The National Treasury FMPPI requires that institutions should have appropriate systems to collect, collate, verify and store performance information to ensure valid, accurate and complete reporting of actual achievements against planned objectives, indicators and targets.

I was unable to obtain the information and explanations I considered necessarytosatisfymyselfastothereliabilityofsignificanttargetspresentedwith respect to programme 2.

Thiswasduetolimitationsplacedonthescopeofmyworkduetotheinstitution’s records not permitting the application of alternative audit procedures to satisfy myself as to the reliability of these targets.

Additional matters12. I draw attention to the following matters below. These matters do not have an

impactonthepredeterminedobjectivesauditfindingsreportedabove.

Achievement of planned targets13. Of the total number of 45 targets planned for the year, 24 were not achieved

during the year under review. This represents 53% of total planned targets that were not achieved during the year under review.

This was mainly due to capacity constraints of the QCTO for the year under review.


Material adjustments to the annual performance report14.Materialmisstatementsintheannualperformancereportwereidentified

during the audit, all of which were corrected by management.

Compliance with laws and regulations 15. I performed procedures to obtain evidence that the entity had complied

withapplicablelawsandregulationsregardingfinancialmatters,financialmanagementandotherrelatedmatters.Myfindingsonmaterialnon-compliancewithspecificmattersinkeyapplicablelawsandregulations,assetout in the General Notice issued in terms of the PAA, are as follows:

Annual financial statements16.Thefinancialstatementssubmittedforauditingwerenotpreparedin

accordance with SA GRAP, as required by section 55(1)(a) and (b) of the PFMA. Material misstatements of current liabilities, expenditure and commitmentsidentifiedbytheauditorsinthesubmittedfinancialstatementweresubsequentlycorrected,resultinginthefinancialstatementsreceivinganunqualifiedauditopinion.

Expenditure management17.Theaccountingauthoritydidnottakeeffectivestepstopreventirregular

expenditure, as required by section 51(1) (b) (ii) of the PFMA.

Internal control 18.Iconsideredinternalcontrolrelevanttomyauditofthefinancialstatements,

annual performance report and compliance with laws and regulations. The matter reported below under the fundamentals of internal control is limited tothesignificantdeficienciesthatresultedinthefindingsontheannualperformancereportandthefindingsoncompliancewithlawsandregulationsincluded in this report.

Leadership19. Management does not have adequate standard operating policies and

procedures detailing how performance information should be prepared, collected,verifiedandreportedintheannualperformancereport.

Financial and performance management20. The QCTO does not have an accrual accounting system in place that allows

foraccuratefinancialreportingonamonthlybasis,includingtheannualfinancialstatements.

21. The QCTO did not develop and implement appropriate processes for the periodunderreviewtoensurecrediblefinancialreporting.

Pretoria31 July 2013



ANNUAL FINANCIAL STATEMENTS


Quality Council for Trades and Occupations(QCTO)

Financial Statementsfor the year ended 31 March 2013

The Annual Financial Statements for the year ended 31 March 2013 have been approved by the Council in terms of section55(1)(c)ofthePublicFinanceManagementAct(PFMA),No1of1999,asamended,on31July2013.

_________________________________________________________________

Prof. Peliwe P LolwanaChairperson: QCTO

Accounting Authority


Quality Council for Trades and Occupations


for the year ended 31 March 2013

ContentsPage

Statement of Financial Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

Statement of Financial Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98

Statement of Changes in Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99

Cash Flow Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100

Statement of Comparison of Budget against Actual Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102

Accounting Policies to the Annual Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103

Notes to the Annual Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124




STATEMENT OF FINANCIAL PERFORMANCE


2012/13 2011/12

Notes R’000 R’000

REVENUE FROM NON-EXCHANGE TRANSACTIONS 20 352 18 387

State Contribution 2 20 352 18 387

REVENUE FROM EXCHANGE TRANSACTIONS 837 123

Finance income 3 837 123

TOTAL REVENUE 21 189 18 510

EXPENDITURE 15 836 10 724

Compensation of employees 4 9 184 5 279

Operating expenses 5 6 527 5 436

Depreciation 6 124 9

NET SURPLUS FOR THE YEAR 5 354 7 786




STATEMENT OF FINANCIAL POSITION

as at 31 March 2013

2012/13 2011/12Notes R’000 R’000

ASSETSNon-Current Assets 881 249

Property, Plant and Equipment 6 881 249

Current assets 24 792 17 101 Cash and cash equivalents 7 24 662 17 101 Deferred Expenditure 8 129 -

TOTAL ASSETS 25 672 17 350

LIABILITIESCurrent liabilities 5 648 2 680

Trade and other payables from non-exchange transactions 9.1 4 978 2 099 Trade and other payables from exchange transactions 9.2 671 581

TOTAL LIABILITIES 5 648 2 680

TOTAL NET ASSETS 20 024 14 670

FUNDS CONTRIBUTED BY:Capital and reserves

Accumulated surplus 20 024 14 670

TOTAL CAPITAL AND RESERVES 20 024 14 670




STATEMENT OF CHANGES IN NET ASSETS


NoteAccumulated

surplus

R’000

Balance at 01 April 2011 6 884

Net surplus per Statement of Financial Performance 7 786

Balance at 31 March 2012 14 670

Net surplus per Statement of Financial Performance 5 354

Balance at 31 March 2013 20 024




CASH FLOW STATEMENT


2012/13 2011/12


CASH FLOWS FROM OPERATING ACTIVITIES

Operating activities

Cashreceiptsfromstakeholders 20 352 18 387

State Contribution 20 352 18 387

Cashpaidtostakeholderssuppliersandemployees (12 839) (10 134)

Compensation of employees (8 608) (4 696)

Payments to suppliers and other (4 231) (5 438)

Netdecrease/(increase)inworkingcapital (33) 8 983

Cash generated from operations 10 7 480 17 236

Finance income 837 123

Net cash inflow from operating activities 8 317 17 359




CASH FLOW STATEMENT (Continued)


2012/13 2011/12


Cash flow from investing activities

Additions to Property plant and equipment at cost 6 (756) (258)

Net cash outflow from investing activities (756) (258)

Net increase in cash and cash equivalents 7 561 17 101

Cash and cash equivalents at beginning of year 17 101 -

Cash and cash equivalents at end of year 7 24 662 17 101


Quality Council for Trades and OccupationsANNUAL FINANCIAL STATEMENTSSTATEMENT OF COMPARISON OF BUDGET AGAINST ACTUAL AMOUNTSfor the year ended 31 March 2013

Approved and Final budget *

Actual amounts on accrual basis

Adjustments to comparable basis

Actual amounts on comparable basis

(Under) / Over budget

Under / (Over) budget

Notes R’000 R’000 R’000 R’000 R’000 %

REVENUE FROM NON-EXCHANGE TRANSACTIONS 19.1 20,352 20,352 - 20,352 - 0%State Contribution 20,352 20,352 - 20,352 - 0%

REVENUE FROM EXCHANGE TRANSACTIONS 19.1 - 837 - 837 837 100%Finance income - 837 - 837 837 100%

TOTAL REVENUE 20,352 21,189 - 21,189 837 4%

EXPENSESEmployee costs 19.2 13,749 9,184 (576) 8,608 (5,141) -37%

Goods and Services 19.3 13,060 6,651 (2,419) 4,232 (8,828) -68%Advertising 350 938 (609) 330 (20) -6%Administration 720 - - - (720) -100%Agency and support / outsourced services 220 - - - (220) -100%Assets less than R5 000 160 212 (52) 160 0 0%Audit costs 416 - - - (416) -100%BankCharges 72 12 - 12 (60) -84%Board Costs 600 181 5 186 (414) -69%Bursaries (employees) 250 - - - (250) -100%Catering: internal activities 300 134 (14) 119 (181) -60%Communication 148 135 (34) 101 (47) -32%Computer services 1,000 - - - (1,000) -100%Consultants 2,500 2,193 (546) 1,647 (853) -34%Contractors 40 11 (11) - (40) -100%Entertainment 25 - - - (25) -100%Inventory 100 20 (6) 14 (86) -86%Lease payments 800 92 (31) 60 (740) -92%Legal fees 257 - - - (257) -100%Non life insurance 132 - - - (132) -100%Printing and Publication 1,231 916 (339) 578 (653) -53%Property payments 720 - - - (720) -100%Repairs and maintenance 50 - - - (50) -100%Research and development 200 - - - (200) -100%Training and staff development 500 62 (16) 46 (454) -91%Travel and subsistence 742 882 (153) 729 (13) -2%Utilities 250 - - (250) -100%Venues and facilities 294 633 (490) 143 (151) -51%OtherunclassifiedexpenditureOf Which:Travel and accommodation 200 - - (200) -100%Resettlement costs 395 107 - 107 (288) -73%Stationary 388 - - - (388) -100%Promotional/Marketing - - - - - 0%Specify5 - - - - - 0%Depreciation - 124 (124) - - 0%

Capital expenditure 19.4 1,400 756 33 789 (611) -44%

NET SURPLUS FOR THE YEAR (7,857) 4,598 2,962 7,560 15,417 -196%

* Therearenochangesbetweentheapprovedandfinalbudget.



ACCOUNTING POLICIES TO THE ANNUAL FINANCIAL STATEMENTS


1. Basis of preparationThefinancialstatementshavebeenpreparedinaccordancewiththeeffectiveStandardsofGenerallyRecognisedAccountingPractices(GRAP)including any interpretations, guidelines and directives issued by the Accounting Standards Board.

TheAccountingFrameworkoftheentity,basedontheprecedingparagraph,isthereforeasfollows:

Standards of GRAP approved and effective:� GRAP1:Presentationoffinancialstatements(revised);� GRAP2:Cashflowstatements(revised);� GRAP 3: Accounting policies, changes in accounting estimates and errors (revised);� GRAP 4: The effects in changes in foreign exchange rates (revised);� GRAP 5: Borrowing costs;� GRAP6:Consolidatedandseparatefinancialstatements(revised);� GRAP 7: Investments in associates (revised);� GRAP 8: Investments in joint ventures (revised);� GRAP 9: Revenue from exchange transactions (revised);� GRAP10:Financialreportinginhyperinflationaryeconomies(revised);� GRAP 11: Construction contracts (revised);� GRAP 12: Inventories (revised);� GRAP 13: Leases (revised);� GRAP 14: Events after reporting date (revised);� GRAP 16: Investment property (revised);





� GRAP 17: Property, plant and equipment (revised);� GRAP 18: Segment Reporting;� GRAP 19: Provisions, contingent liabilities and contingent assets (revised);� GRAP 21: Impairment of Non-cash-generating Assets;� GRAP 23: Revenue from Non-exchange Transactions (Taxes and Transfers);� GRAP 24: Presentation of Budget Information in the Financial Statements;� GRAP 26: Impairment of Cash-generating Assets; � GRAP 100: Non-current assets held for sale and discontinued operations (revised);� GRAP 101: Agriculture;� GRAP 102: Intangible assets;� GRAP 103: Heritage Assets; and� GRAP 104: Financial Instruments.Directives issued and effective:� Directive 1: Repeal of existing transitional provisions in , and consequential amendments to, standards of GRAP;� Directive 2: Transitional provisions for the adoption of standards of GRAP by Public Entities, Municipal Entities and Constitutional Institutions;� Directive5:DeterminingtheGRAPreportingframework;and� Directive 7: The application of deemed cost on the adoption of standards of GRAP.

Interpretations of the Standards of GRAP approved:� IGRAP 1: Applying the probability test on the initial recognition of exchange revenue;� IGRAP 2: Changes in existing decommissioning, restoration and similar liabilities;� IGRAP 3: Determining whether an arrangement contains a lease;





� IGRAP 4: Rights to interest arising from decommissioning, restoration and environmental rehabilitation funds;� IGRAP5:ApplyingtherestatementapproachunderthestandardofGRAPonfinancialreportinginhyperinflationaryeconomies;� IGRAP 6: Loyalty programmes;� IGRAP 8: Agreements for the construction of assets from exchange transactions;� IGRAP 9: Distributions of non-cash assets to owners;� IGRAP 10: Assets received from customers;� IGRAP 13: Operating leases - Incentives; and� IGRAP 14: Evaluating the substance of transactions involving the legal form of a lease.

Approved guidelines of standard of GRAP:� Guide 1: Guideline on Accounting for Public Private Partnerships.

Effective accrual based IPSAS: � IPSAS 20: Related parties disclosure; and

Effective IFRSs and IFRICs that are applied:� IFRS 4 (AC 141): Insurance contracts;� IFRS 6 (AC 143): Exploration for and evaluation of mineral resources;� IAS 12 (AC 102): Income taxes;� IAS19(AC116):Employeebenefits;� SIC - 21 (AC 421): Income taxes: Recovery of revalued non-depreciable assets;� SIC - 25 (AC 425): Income taxes: Changes in the tax status of an entity or its shareholders;





� SIC - 29 (AC 429): Service concession arrangements: Disclosures; and� IFRIC 12 (AC 445): Service concession arrangements.

1.2 Changes in accounting policies, estimates and errorsTheaccountingpoliciesappliedareconsistentwiththoseusedtopresentthepreviousyear'sfinancialstatements,unlessexplicitlystatedotherwise.

The entity changes an accounting policy only if the change:� Is required by a standard of GRAP; or� Results in the Annual Financial Statements providing reliable and more relevant information about the effects of transactions, other events or

conditions,ontheperformanceorcashflow.

Changes in accounting policies that are affected by management have been applied retrospectively in accordance with GRAP 3 requirements, excepttotheextentthatitisimpracticabletodeterminetheperiod-specificeffectsorthecumulativeeffectofthechangeinpolicy.Insuchcasesthe entity shall restate the opening balances of assets, liabilities and net assets for the earliest period for which retrospective restatement is practicable.

Changes in accounting estimates are applied prospectively in accordance with GRAP 3 requirements. Details of changes in estimates are disclosed in the notes to the Annual Financial Statements where applicable.

Correction of errors is applied retrospectively in the period in which the error has occurred in accordance with GRAP 3 requirements, except totheextentthatitisimpracticabletodeterminetheperiod-specificeffectsorthecumulativeeffectoftheerror.Insuchcasestheentityshallrestate the opening balances of assets, liabilities and net assets for the earliest period for which retrospective restatement is practicable.





1.3 Critical judgements, estimations and assumptionsIntheapplicationoftheQCTOaccountingpolicies,managementisrequiredtomakejudgements,estimationsandassumptionsaboutthecarrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on past experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

1.3.1 Property, plant and equipmentThe useful lives of assets are based on management's estimation. Management considers the following factors to determine the optimum useful life expectation for each of the individual items of property, plant and equipment.

� Expected usage of the asset. Usage is assessed by reference to the assets expected capacity or physical output;� Expected physical wear and tear, which depends on operational factors such as the number of shifts for which the asset is to be used, the

repair and maintenance programme, and the care and maintenance of the asset while idle;� Technicalorcommercialobsolescencearisingfromchangesorimprovementinproductionorfromachangeinthemarketdemandforthe

product or service output of the asset; and� Exit policy of the company.

The estimation of residual value of assets is also based on management's judgement that the assets will be sold and what their condition will be at that time. For assets that incorporate both a tangible and intangible portion, management uses judgement to assess which element is more significanttodeterminewhetheritshouldbetreatedasproperty,plantandequipmentorintangibleassets.





1.3 Critical judgements, estimations and assumptions (Continued)1.3.2 Determination of impairments of property, plant and equipment

Managementisrequiredtomakejudgementsconcerningthecause,timingandamountofimpairment.Intheidentificationofimpairmentindicators, management considers the impact of changes in current competitive conditions, availability of funding, technological obsolescence, discontinuance of services and other circumstances that could indicate that an impairment exists. QCTO applies the impairment assessment to itsseparatecashgeneratingunits.Thisrequiresmanagementtomakesignificantjudgementsconcerningtheexistenceofimpairmentindicators,identificationofseparatecashgeneratingunits,remainingusefullivesofassetsandestimatesofprojectedcashflowsandfairvaluelesscoststo sell. Management judgement is also required when assessing whether a previously recognised impairment loss should be reversed.

Whereimpairmentindicatorsexist,thedeterminationoftherecoverableamountofacash-generatingunitrequiresmanagementtomakeassumption to determine the fair value less costs to sell and value in use. Key assumptions on which management has based its determination of fair value less costs to sell include the existence of binding sale agreements and for the determination of value in use include projected revenues, gross margins, capital expenditure and expected customer bases. The judgements, assumptions and methodologies used can have a material impact on the fair value and ultimately the amount of any impairment.

1.4 Presentation currencyThesefinancialstatementsarepresentedinSouthAfricanrandwhichisthefunctionalcurrencyoftheentity.Figureshavebeenroundedofftothe nearest thousand Rand (R'000).

1.5 Going concern assumptionThesefinancialstatementshavebeenpreparedonthegoingconcernbasis.InassessingwhethertheQCTOisagoingconcern,theAccountingAuthorityhasconsideredthefactthattheQCTOreceivesStateContributions(VotedFunds)whichissufficienttoclassifytheQCTOasagoingconcern for at least the next twelve months.





1.6 OffsettingAssets, liabilities, revenues and expenses have not been offset except when offsetting is required or permitted by the standard of GRAP, IPSAS or GAAP.

1.7 Comparative informationBudget information in accordance with GRAP 24 has been provided in the Statement of Comparison of Budget Against Actual Amounts for the currentfinancialyearonly,andformspartoftheauditedannualfinancialstatements.(Refertonote19formoredetailonmaterialvariances).

Whenthepresentationorclassificationofitemsintheannualfinancialstatementsisamended,priorperiodcomparativeamountsarerestated.Thenatureandreasonforthereclassificationisdisclosed.Whereaccountingerrorshavebeenidentifiedinthecurrentyear,thecorrectionis made retrospectively as far as is practicable, and the prior year comparatives are restated accordingly. Where there has been a change in accounting policy in the current year, the adjustment is made retrospectively as far as is practicable, and the prior year comparatives are restated accordingly.

1.8 Events after reporting dateEvents after the reporting date are those events, both favourable and unfavourable, that occur between the reporting date and the date when the financialstatementsareauthorisedforissue.Eventsafterreportingdatethatareclassifiedasadjustingeventshavebeenaccountedforintheannualfinancialstatements.Eventsafterreportingdatethathavebeenclassifiedasnon-adjustingeventshavebeendisclosedinthedisclosurenotestotheannualfinancialstatements.





1.9 Revenue recognitionRevenueisrecognisedwhenitsprobablethatfutureeconomicbenefitsorservicepotentialwillflowtotheentity,andtheentitycanmeasurethebenefitsreliably.

Accounting policy 1.9.1 on revenue from non-exchange transactions and accounting policy 1.9.2 on revenue from exchange transactions describes the conditions under which revenue will be recorded by the management of the entity.

Inmakingtheirjudgement,themanagementconsideredthedetailedcriteriaforrecognitionofrevenueassetoutinGRAP9(revenuefromexchangetransactions)andGRAP23(revenuefromnon-exchangetransactions).Themanagementoftheentityissatisfiedthatrecognitionofthe revenue in the current year is appropriate.

1.9.1 Revenue from non-exchange transactions Revenue from non-exchange transactions refers to transactions where the entity received revenue from another entity without directly giving approximately equal value in exchange. Revenue from non-exchange transactions is generally recognised to the extent that the related receipt orreceivablequalifiesforrecognitionasanassetandthereisnoobligationorconditiontorepaytheamount.

1.9.1.1 State contributionsState contributions represents unconditional grants received from the Department of Higher Education and Training (DHET) and are measured at fair value of the consideration received.

1.9.2 Revenue from exchange transactionsRevenue from exchange transactions refers to revenue that accrued to the entity directly in return for services rendered / goods sold, the value of which approximates the consideration received or receivable.





1.9 Revenue recognition (Continued)1.9.2.1 Finance income

Financeincomerepresentsinterestearnedoninvestmentsandisaccruedonatimeproportionbasis,takingintoaccounttheprincipalamountoutstanding and the effective interest rate over the period to maturity.

1.10 Expenditure1.10.1 Short term employee benefits

Shorttermemployeebenefitscomprisesalaries,paidannualleave,paidsickleave,thirteenthcheques,performancebonusesandnon-monetarybenefitssuchasmedicalcare,housingandcarallowances.ThecostofshorttermemployeebenefitsarechargedtotheStatementofFinancialPerformanceasemployeecostsintheyeartowhichtheyrelate,exceptfornon-accumulatingbenefitswhichareonlyrecognisedwhenthespecificeventoccurs.

ShorttermemployeebenefitsthatgiverisetoapresentlegalorconstructiveobligationareincludedintheStatementofFinancialPositionasaccruals in the year to which they relate.

1.10.2 Expenditure on Goods and ServicesExpenditure for goods and services are recognised as operating expenses in the period in which they have occurred.

1.10.3 Fruitless and wasteful expenditureFruitless and wasteful expenditure means expenditure that was made in vain and would have been avoided had reasonable care been exercised.

Fruitless and wasteful expenditure is recognised as expenditure in the Statement of Financial Performance according to the nature of the payment and not as a separate line item on the face of the statement. If the expenditure is recoverable it is treated as an asset until it is recovered from the responsible person or written off as irrecoverable in the Statement of Financial Performance.





1.10 Expenditure (Continued)1.10.4 Irregular expenditure

Irregular expenditure comprises expenditure, other than unauthorised expenditure, incurred in contravention of or that is not in accordance with a requirement of any applicable legislation, including: the Public Finance Management Act 1 of 1999 (as amended by Act 29 of 1999); the State tender Board Act, 1968 (Act No. 86 of 1968, or any regulation made in terms of that Act); or any provincial legislation providing for the procurement procedures in that provincial government.

Irregular expenditure is recognised as expenditure in the Statement of Financial Performance. If the expenditure is not condoned by the relevant authority it is treated as an asset until it is recovered or written off as irrecoverable.

1.10.5 Unauthorised expenditureUnauthorised expenditure is the overspending of a vote or a main division within a vote; or expenditure that was not made in accordance with the purpose of a vote or, in the case of a main division, not in accordance with the purpose of the main division.

When unauthorised expenditure is discovered it is recognised as an asset in the Statement of Financial Position until such time that the expenditure is either approved by the relevant authority, recovered from the responsible person or written off as irrecoverable in the Statement of Financial Performance.

Unauthorised expenditure approved with funding is recognised in the Statement of Financial Performance when the unauthorised expenditure is approved and the related funds are received. Where the amount is approved without funding it is recognised as expenditure, subject to the availability of savings, in the Statement of Financial Performance on the date of approval.





1.11 Property, plant and equipmentAll items of property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition or construction of the item of property, plant and equipment.

Subsequent costs are included in the assets carrying amount or recognised as a separate asset, as appropriate, only when it is probable that the futureeconomicbenefitsassociatedwiththeitemwillflowtotheentityandthecostoftheitemcanbemeasuredreliably.AllotherrepairsandmaintenancearechargedtotheStatementofFinancialPerformanceduringthefinancialperiodinwhichtheyareincurred.

Property, plant and equipment, except for land, will be depreciated on the straight-line basis over their expected useful lives to their estimated residualvalue.Thedepreciationchargewillberecognisedinstatementoffinancialperformanceunlessitisincludedinthecarryingamountofanother asset.

Depreciation is calculated using the straight-line method to allocate their cost or revalued amounts to their residual values over their estimated useful lives, as follows:

� OfficeFurniture 5 to10 Years� Computer Equipment 2 to 3 Years

The depreciation methods, estimated remaining useful lives and residual values are reviewed on an annual basis. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with carrying amount and are recognised in the Statement of Financial Performance.





1.12 Cash and cash equivalentsCashincludescashonhand(includingpettycash)andcashwithbanks(includingcalldeposits).Cashequivalentsareshort-termhighlyliquidinvestments,readilyconvertibleintoknownamountsofcash,thatareheldwithregisteredbankinginstitutionswithmaturitiesofthreemonthsorlessandaresubjecttoaninsignificantriskofchangeinvalue.

ForpurposesoftheCashFlowStatement,cashandcashequivalentscomprisecashonhand,depositsheldatcallwithbanksandinvestmentsinfinancialinstruments.

1.13 Liabilities1.13.1 Defined contribution plans

Adefinedcontributionplanisaplanunderwhichtheentitypaysfixedcontributionsintoaseparateentity.Theentityhasnolegalorconstructiveobligationtopayfurthercontributionsifthefunddoesnotholdsufficientassetstopayallemployeesthebenefitsrelatingtoserviceinthecurrentor prior periods.

TheQCTOprovidesforretirementbenefitsforallitspermanentemployeesthroughadefinedcontributionschemethatissubjecttothePensionFunds 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 13%ofpensionableemoluments.Theentity'scontributionstothedefinedcontributionschemeareestablishedintermsoftherulesgoverningthe scheme.

Contributions are recognised in the Statement of Financial Performance in the period in which the service is rendered by the relevant employees. The entity has no further payment obligations once the contributions have been paid.





1.13 Liabilities (Continued)1.13.2 Leave, service and performance bonus accruals

The entity has opted to treat its provision for leave and bonus pay (including performance bonus) as an accrual.

Thecostofallshort-termemployeebenefitsisrecognisedduringtheperiodinwhichtheemployeerenderstherelatedservice.Employeeentitlements are recognised when they accrue to employees. An accrual is recognised for the estimated liability as a result of services rendered byemployeesuptothereportingdate.AccrualsrelatedtoemployeebenefitsincludedintheStatementofFinancialPositionincludesannualleave, capped leave and thirteenth cheque commitments at year end (based on current salary rates).

The liability for leave pay is based on the total accrued leave days at year end and is shown as an accrual in the Statement of Financial Position. Theentityrecognisestheexpectedcostofperformancebonusesonlywhentheentityhasapresentlegalorconstructiveobligationtomakesuchpaymentandareliableestimatecanbemade.Noaccrualismadeforpostretirementbenefits,astheQCTOdoesnotprovideforsuchbenefitsforitsemployees.

1.13.3 ProvisionsIntermsofGRAP19,aprovisionisdefinedasaliabilityofuncertaintimingoramount.Provisionscanbedistinguishedfromotherliabilitiessuchas payables and accruals because there is uncertainty about the timing or amount of the future expenditure required in settlement.

Provisionsarerecognisedwhenthereisapresentlegalorconstructiveobligationasaresultofapasteventanditisprobablethatanoutflowofresources will be required to settle the obligation and the amount can be determined reliably.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate. The increase in the provision due to the passage of time is recognised as interest expense.





1.14 Financial instrumentsTheentityhasvarioustypesoffinancialinstrumentsandthesecanbebroadlycategorisedaseitherfinancialassetsorfinancialliabilities.Theclassificationoffinancialassetsandliabilities,intocategories,isbasedonjudgementbymanagement.

FinancialassetsandfinancialliabilitiesarerecognisedontheQCTOStatementofFinancialPositionwhentheQCTObecomesapartytothecontractual provisions of the instrument.

Financial instruments are initially measured at fair value. Subsequent to initial recognition these instruments are measured as set out below.

1.14.1 Financial assets - classificationAfinancialassetisanyassetthatisacashorcontractualrighttoreceivecash.Theentity’sprincipalfinancialassetsasreflectedonthefaceoftheStatementofFinancialPositionareclassifiedasfollows:

� Cash and cash equivalents; and� Trade and other receivables.

InaccordancewithGRAP104thefinancialassetsoftheentityareclassifiedasfollowsasallowedbythestandard:

Type of financial asset Classification in terms of IAS 39.09 Cash and cash equivalents Loans and receivables Trade and other receivables Loans and receivables





1.14 Financial instruments (Continued)Cashincludescashonhand(includingpettycash)andcashwithbanks(includingcalldeposits).Cashequivalentsareshort-termhighlyliquidinvestments,readilyconvertibleintoknownamountsofcash,thatareheldwithregisteredbankinginstitutionswithmaturitiesofthreemonthsorlessandaresubjecttoaninsignificantriskofchangeinvalue.ForpurposesoftheCashFlowStatement,cashandcashequivalentscomprisecashonhand,depositsheldatcallwithbanksandinvestmentsinfinancialinstruments.Theentitycategorisescashandcashequivalentsasfinancialassets:Loansandreceivables.

Loansandreceivablesarenon-derivativefinancialassetswithfixedordeterminablepaymentsthatarenotquotedinanactivemarket.Theyareincludedincurrentassets,exceptformaturitiesgreaterthantwelvemonths,whichareclassifiedasnon-currentassets.Loansandreceivablesareinitiallymeasuredatcostwhichrepresentsfairvalue.Afterinitialrecognitionfinancialassetsaremeasuredatamortisedcost,usingtheeffective interest method less provision for impairment.

1.14.2 Financial liabilities - classificationAfinancialliabilityisacontractualobligationtodelivercashoranotherfinancialassettoanotherentity.TheentitiesprincipalfinancialliabilitiesrelatestoaccountspayablewhichareclassifiedasfollowsonthefaceoftheStatementofFinancialPosition:

� Trade and other payables.

Therearetwomaincategoriesoffinancialliabilities,theclassificationbasedonhowtheyaremeasured.Financialliabilitiesmaybemeasuredat:

� Fairvaluethroughprofitorloss;or� At amortised cost using the effective interest method.





1.14 Financial instruments (Continued)Financialliabilitiesthataremeasuredatfairvaluethroughprofitorlossarefinancialliabilitiesthatareessentiallyheldfortrading(i.e.purchasedwiththeintentiontosellorrepurchaseintheshortterm;derivativesotherthanhedginginstrumentsorarepartofaportfoliooffinancialinstrumentswherethereisrecentactualevidenceofshort-termprofiteeringorarederivatives).Financialliabilitiesthataremeasuredatfairvaluethroughprofitorlossarestatedatfairvalue,withanyresultantgainorlossrecognisedintheStatementofFinancialPerformance.

AnyotherfinancialliabilitiesareclassifiedasOtherFinancialLiabilitiesandareinitiallymeasuredatfairvalue.Otherfinancialliabilitiesaresubsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.

InaccordancewithGRAP104theFinancialLiabilitiesoftheentityareallclassifiedas“otherfinancialliabilities”.

1.14.3 Initial and subsequent measurement

1.14.3.1 Financial assets: Trade and other receivablesTrade and other receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

1.14.3.2 Financial liabilities: Trade and other payablesTradeandotherpayablefinancialinstrumentsaremeasuredatamortisedcostusingtheeffectiveinterestratemethod.Otherpayablesarethosepayablesthatdonotmeetthedefinitionofafinancialliability.Accrualsrepresentgoods/servicesthathavebeenreceivedtogetherwithanaccompaniedinvoicebutfinalauthorisationtoaffectpaymenthasnotbeeneffected.AccrualsarerecognisedintheStatementofFinancialPosition as trade and other payables.





1.14 Financial instruments (continued)1.14.4 Impairment of financial assets

Financialassets,otherthanthoseatfairvaluethroughprofitorloss,areassessedforindicatorsofimpairmentateachbalancesheetdate.Financial assets are impaired where there is objective evidence of impairment of Financial Assets (such as the probability of insolvency or significantfinancialdifficultiesofthedebtor).Ifthereissuchevidencetherecoverableamountisestimatedandanimpairmentlossisrecognisedin accordance with GRAP 104.

Accounts receivable are initially valued at cost, which represents fair value, and subsequently carried at amortised cost using the effective interest rate method. An estimate is made for a provision for impairment based on past default experience of all outstanding amounts at year-end.Baddebtsarewrittenofftheyearinwhichtheyareidentifiedasirrecoverable.Amountsreceivablewithin12monthsfromthedateofreportingareclassifiedascurrent.

Thecarryingamountofthefinancialassetisreducedbytheimpairmentlossforallfinancialassetswiththeexceptionoftradereceivables,where the carrying amount is reduced through the use of an allowance account. Changes in the carrying amount of the allowance account are recognised in the Statement of Financial Performance. When the receivable is uncollectable, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited to the Statement of Financial Performance.

1.14.5 Impairment and gains and losses from subsequent measurementWith the exception of Available-for-Sale equity instruments, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through the Statement of Financial Performance to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

Gainsandlossesarisingfromachangeinthefairvalueofavailable-for-salefinancialassetsarerecognisedinequity,untiltheinvestmentisdisposedoforisdeterminedtobeimpaired,atwhichtimethenetprofitorlossisincludedinsurplusordeficitfortheperiod.





1.14 Financial instruments (continued)1.14.6 Derecognition of financial assets

AfinancialassetoraportionthereofisderecognisedwhentheQCTOrealisesthecontractualrightstothebenefitsspecifiedinthecontract,therightsexpire,theQCTOsurrendersthoserightsorotherwiselosescontrolofthecontractualrightsthatcomprisethefinancialasset.Onderecognition,thedifferencebetweenthecarryingamountofthefinancialassetandthesumoftheproceedsreceivableandanyprioradjustmenttoreflectthefairvalueoftheassetthathadbeenreportedinequityisincludedinsurplusordeficitfortheperiod.

Iftheentityneithertransfersnorretainssubstantiallyalltherisksandrewardsofownershipandcontinuestocontrolthetransferredasset,theentity recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the entity retains substantially all therisksandrewardsofownershipofatransferredfinancialasset,theentitycontinuestorecognisethefinancialassetandalsorecognisesacollateralised borrowing for the proceeds received.

1.14.7 Derecognition of financial liabilitiesAfinancialliabilityorapartthereofisderecognisedwhentheobligationspecifiedinthecontractisdischarged,cancelled,orexpires.Onderecognition,thedifferencebetweenthecarryingamountofthefinancialliability,includingrelatedunamortisedcosts,andtheamountpaidforitisincludedinsurplusordeficitfortheperiod.

1.14.8 Fair value considerationsThefairvaluesatwhichfinancialinstrumentsarecarriedatthebalancesheetdatehavebeendeterminedusingavailablemarketvalues.Wheremarketvaluesarenotavailable,fairvalueshavebeencalculatedbydiscountingexpectedfuturecashflowsatprevailinginterestrates.Thefairvalueshavebeenestimatedusingavailablemarketinformationandappropriatevaluationmethodologies,butarenotnecessarilyindicativeoftheamountsthattheQCTOcouldrealiseinthenormalcourseofbusiness.Thecarryingamountsoffinancialassetsandfinancialliabilities 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.





1.14 Financial instruments (continued)1.14.9 Risk management of financial assets and liabilities

Itisthepolicyoftheentitytodiscloseinformationthatenablestheuserofitsfinancialstatementstoevaluatethenatureandextentofrisksarisingfromfinancialinstrumentstowhichtheentityisexposedonthereportingdate.

Risksandexposurearedisclosedasfollows:

1.14.9.1 Credit risk:� Eachclassoffinancialinstrumentisdisclosedseparately.� Maximumexposuretocreditrisknotcoveredbycollateralisspecified.� Financialinstrumentscoveredbycollateralarespecified.

1.14.9.2 Liquidity risk:� Amaturityanalysisforfinancialassetsandliabilitiesthatshowstheremainingcontractualmaturities.� Liquidityriskismanagedbyensuringthatallassetsarereinvestedatmaturityatcompetitiveinterestratesinrelationtocashflow

requirements. Liabilities are managed by ensuring that all contractual payments are met on a timeous basis and, if required, additional new arrangementsareestablishedatcompetitiveratestoensurethatcashflowrequirementsaremet.

� Amaturityanalysisforfinancialliabilities(whereapplicable)thatshowstheremainingundiscountedcontractualmaturities is disclosed in note12totheannualfinancialstatements.





1.15 Related parties1.15.1 Related party transactions

Partiesareconsideredtoberelatedifonepartyhastheabilitytocontroltheotherpartyorexercisesignificantinfluenceovertheotherpartyinmakingfinancialandoperatingdecisionsoriftherelatedpartyentityandanotherentityaresubjecttocommoncontrol.

Relatedpartytransactionsareclassifiedbytheentityasthosetransactionsbetweenrelatedpartiesotherthantransactionsthatwouldoccurwithin a normal supplier or client/recipient relationship on terms and conditions no more or less favourable than those which it is reasonable to expect the entity would have adopted if dealing with that individual or entity at arm's length in the same circumstances. Only transactions with related parties not at arm’s length or not in the ordinary course of business are disclosed.

1.15.2 Key management personnelKeymanagementpersonnelisdefinedasbeingindividualswiththeauthorityandresponsibilityforplanning,directingandcontrollingtheactivities of the entity, including those charged with the governance of the entity in accordance with legislation, in instances where they are required to perform such functions. Close members of the family of a person are considered to be those family members who may be expected toinfluence,orbeinfluencedby,thatmanagementintheirdealingswiththeentity.

Membersofseniormanagementonpostlevel13andaboveareregardedaskeymanagement.Transactionsconductedwithkeymanagement,aswellaswithclosefamilymembersofkeymanagement,isregardedasrelatedpartytransactions.Onlytransactionswithrelatedpartiesnotatarm’s length or not in the ordinary course of business are disclosed.

1.16 CommitmentsCommitments include expenditure approved and contracted as well as expenditure approved but not yet contracted. Approved and contracted commitments includes expenditure that has been approved and the contract has been awarded at the reporting date. Approved but not yet contractedcommitmentsincludesexpenditurethathasbeenapprovedandthecontracthasyettobeawardedorisawaitingfinalisationatthereporting date.





1.17 Contingent assets and contingent liabilitiesManagementjudgementisappliedwhenmeasuringandrecognisingcontingentassetsandliabilities.Theprobabilitythataninfloworoutflowofeconomicresourceswilloccurduetopastevents,whichwillonlybeconfirmedbytheoccurrenceornon-occurrenceofoneormorefutureeventsaswellasanypossiblefinancialimpactisdisclosedbasedonmanagementestimationinthedisclosurenotes.

1.18 Comparative figuresWherenecessary,comparativefigureshavebeenadjustedtoconformtochangesinpresentationinthecurrentfinancialyear.

1.19 Standards and amendments to standards issued but not yet effective:

The following GRAP standards have been issued but are not yet effective and have not been early adopted by the entity:

� GRAP 18: Segment reporting;� GRAP25:Employeebenefits(Effectivedate:Notannounced);� GRAP 106: Transfers of functions between entities not under common control (Effective date: Not announced); and� GRAP 107: Mergers (Effective date: Not announced).

Application of all of the above GRAP standards will be effective from the date as announced by the Minister of Finance. Currently, not all of these dates have been announced.

Management has considered all of the above-mentioned GRAP standards issued (both effective and not effective) and anticipates that the adoptionofthesestandardswillnothaveasignificantimpactonthefinancialperformance,financialpositionorcashflowsoftheentitysincetheprincipalsaresimilartothosealreadyappliedundertheequivalentStatementsofSAGAAPandembodiedintothefinancialstatements.




NOTES TO THE ANNUAL FINANCIAL STATEMENTS


2012/13 2011/12

R’000 R’000

2. STATE CONTRIBUTION

Transfer payments received from the Department of Higher Education and Training (DHET) 20 352 18 387

3. FINANCE INCOME

Interest income

ABSA Current Account 837 123

FinanceincomerepresentsinterestreceivedontheABSAbankaccountandisaccruedonatimeproportionbasistakingintoaccounttheprincipalamountoutstanding and the effective interest rate over the period to maturity.






Notes 2012/13 2011/12

R’000 R’000

4. COMPENSATION OF EMPLOYEES

Salaries and wages 8 171 4 731

Basic salaries 6 393 3 244

Performance awards 58 275

Service bonuses 304 211

Other non-pensionable allowance 1 109 603

Allowances - 92

Net movement: Leave accrual 168 194

Net movement: Service bonus accrual 139 112

Social contributions 1 013 548

Providentfundcontributions:definedcontributionplans 792 342

Medical aid contributions 220 205

Bargaining council 1 1

Total 9 184 5 279

Average number of employees 16 13






2012/13 2011/12

R’000 R’000

5. OPERATING EXPENSESBankcharges-commercialbanks 12 1 Consultancy and service provider fees* 2 193 3 179 Assets less than capitalised threshold 212 42 Board Remuneration 181 173 Travel and subsistence 989 291 Communication 135 96 Operating Leases 92 62 Catering 134 107 Venues and Facilities 597 158 Cleaning services 15 4 Training and development 57 38 Printing, publications and stationery 916 705 Laundry services 3 - Courier and delivery 18 22 Inventory 20 2 Advertising 938 556 Contractors 11 -

SETA Levy 5 -

Total 6 527 5 436

* Thecurrentyearconsultancyandserviceproviderfeesareforthefollowingservices:PwC-2011/12AFSpreparationandAuditassistanceandEnterpriseriskmanagementservices SAQA - Secondment of personnel to assist the core business till March 2013. TAU - Strategy planning






6. PROPERTY, PLANT AND EQUIPMENT Office Equipment

Computer Equipment

Total

R’000 R’000 R’000

2012/13

Reconciliation of cost to net book value

Opening cost price 77 181 258

Additions 537 219 756

Less: Accumulated Depreciation (37) (97) (133)

Closing net book value 31 March 2013 578 303 881

Reconciliation of opening and closing net book value

OpeningNetBookvalue 73 176 249


Depreciation charge (33) (91) (124)







6. PROPERTY, PLANT AND EQUIPMENT (Continued)

2011/12Office

EquipmentComputer Equipment

Total

Reconciliation of cost to net book value R’000 R’000 R’000

Opening cost price - - -


Less: Accumulated Depreciation (4) (5) (9)


Reconciliation of opening and closing net book value

OpeningNetBookvalue - - -


Depreciation charge (4) (5) (9)







Notes 2012/13 2011/12

R’000 R’000

7. CASH AND CASH EQUIVALENTS

Cashatbank:Asset 24 662 17 101

Cash and cash equivalents at end of year 24 662 17 101

AsrequiredinTreasuryRegulation31.2NationalTreasuryapprovedthebankswheretheQCTObankaccountsareheld.Theweightedaverageinterestrateonshorttermbankdepositswas3.18%forthefinancialyear(2012:3.71%)

Cashincludescashwithcommercialbanks.Cashequivalentsareshorttermhighlyliquidinvestmentsthatareheldwithregisteredbankinginstitutionswithmaturitiesofthreemonthsorlessandthataresubjecttoaninsignificantriskofchangeinvalue.

ForpurposesoftheCashFlowStatementcashandcashequivalentscomprisecashonhanddepositsheldatcallwithbanksnetofbankoverdrafts.






Notes 2012/13 2011/12

R’000 R’000

8. DEFFERED EXPENDITURE

8.1 Deferred expenditure - paid 8.2 129 -

129 -

Deferred expenditure represents payments made in advance to the DHET for Employee Costs and Goods and Services.

8.2 Deferred expenditure at financial year end - paid

DHET 129 -

129 -






Notes 2012/13 2011/12

R’000 R’000

9. TRADE AND OTHER PAYABLES

9.1 TRADE AND OHER PAYABLES FROM NON-EXCHANGE TRANSACTIONS

DHET 4 810 2 099

SAQA 167 -

Total 4 978 2 099

9.2 TRADE AND OHER PAYABLES FROM EXCHANGE TRANSACTIONS

Trade payables

Leave and bonus accruals 9.2.1 671 581

Total 671 581

9.2.1 LEAVE AND BONUS ACCRUALS

Balance at the beginning of the year 581 -

Movement during the year 90 581

Closing carrying amount 9.2.2 671 581






Notes 2012/13 2011/12

R’000 R’000

Current

Leave accrual 362 194

Service bonus accrual 251 112

Performance Bonus accrual 58 275

Total 671 581

Leaveiscalculatedbasedonleavedaysoutstandingatyearendandquantifiedintermsoftotalcostofemploymentperemployee.TheservicebonusandtheperformancebonusaccrualrelatestothirteenthchequeaswellasapprovedperformancebonuscommitmentsowedtoQCTOemployeesatfinancialyearend.






Notes 2012/13 2011/12

R’000 R’000

10. RECONCILIATION OF NET CASH FLOW FROM OPERATING ACTIVITIES TO NET SURPLUS/(DEFICIT)

Net surplus as per Statement of Financial Performance 5 354 7 786

Adjusted for non-cash items:

Depreciation on Property, plant and equipment 124 9

Increase in provisions

Relating to employment 90 581

Adjusted for items separately disclosed

Finance income (837) (123)

Adjustedforworkingcapitalchanges: 2 749 8 983

Decrease/(increase) in Trade and other receivables - 10 132

(Decrease)/increase in Trade and other payables 2 879 (1 149)

Decrease/(increase) in Prepaid Expenditure (129) -

Cash generated from operations 7 480 17 236






Notes 2012/13 2011/12

R’000 R’000

11. COMMITMENTS

Approved and contracted 11.1 - 952

Current Expenditure Commitments 560 123

Capital Expenditure Commitments 144 -

Total future expenditure 704 1 075






2012/13 2011/12

R’000 R’000

11. COMMITMENTS (Continued)

11.1 ExpenditurecontractedforatbalancesheetdatewhichwillbefinancedthroughordinarytradingoperationsbutnotrecognisedintheFinancialStatementsisas follows:

Commitments (2012/13) Approved and contracted

Current year expenditure

Total remaining commitments

Administrative commitments - - -

Total - - -

Commitments (2011/12) Approved and contracted

Current year expenditure

Total remaining commitments

Administrative commitments 952 - 952

Total 952 - 952






2012/13 2011/12

R’000 R’000

12. OPERATING LEASE COMMITMENTS

Operating lease as lessee

Total future minimum lease payments due: 84 140

- Up to 1 year 56 56

- 2 to 5 years 28 84

- More than 5 years - -

The QCTO leases a photocopy machine from Minolco for a period of 36 months effective from 1 October 2011. The lease payment is R 4 677.57 with no annual escalation. The lease agreement is extendable after 36 months for a further 24 months. The details of the lease were not stated in the previous years Annual Financial Statements.






2012/13 2011/12

R’000 R’000

13. FINANCIAL INSTRUMENTS

Categories of financial instruments

ExceptasdetailedinthefollowingtableQCTOmanagementconsidersthatthecarryingamountsoffinancialassetsandfinancialliabilitiesrecordedatamortisedcostinthefinancialstatementsapproximatetheirfairvalues:

Current financial assets

Carrying amount 24 792 17 101

Cash and cash equivalents 24 662 17 101

Deferred expenditure 129 -

Current financial liabilities

Carrying amount

Trade and other payables 5 648 2 680

Current financial assets

Fair value 24 792 17 101

Cash and cash equivalents 24 662 17 101

Deferred expenditure 129 -

Current financial liabilities

Fair value







13. FINANCIAL INSTRUMENTS (Continued)

Fair values

AsindicatedaboveQCTO’sfinancialinstrumentsconsistmainlyofcashandcashequivalents,deferredexpenditureandTradeandotherpayables.Nofinancialinstrumentswerecarriedatanamountinexcessofitsfairvalueandfairvaluescouldbereliablymeasuredforallfinancialinstruments.

FinancialassetsandfinancialliabilitiesarerecognisedontheentitiesStatementofFinancialPositionwhentheentitybecomespartytothecontractualprovisionsoftheinstrument.Thefollowingmethodsandassumptionsareusedtodeterminethefairvalueofeachclassoffinancialinstruments:

Cash and cash equivalents

Cashandcashequivalentscomprisecashonhandandaresubjecttoaninsignificantriskofchangesinvalue.Theseareinitiallyandsubsequentlyrecordedatfairvalue.Thecarryingamountofcashandcashequivalentsapproximatesfairvalueduetotherelativelyshort-termmaturityofthesefinancialassets.

Deferred expenditure

Deferredexpenditurearestatedatamortisedcostwhichapproximatestheirfairvalueduetotherelativelyshort-termmaturityofthesefinancialassets

Accounts payable

Tradeandotherpayablesarestatedatamortisedcostwhichapproximatestheirfairvalueduetotherelativelyshort-termmaturityofthesefinancialliabilities.

Financial instrument risk

InthecourseoftheQCTOoperationsitisexposedtomarketinterestratecreditandliquidityrisk.AsanewlyestablishedSchedule3APublicEntity,QCTOisinprocessofdevelopingacomprehensiveriskstrategyinordertomonitorandcontroltheserisks.Theriskmanagementprocessrelatingtoeachoftheserisksisdiscussed below:







Market risk

Foreign exchange risk

TheQCTOdoesnotinitiateanytransactionswithinternationalpartiesandisthereforenotexposedtoanyexchangeriskduetocurrencyfluctuations.Alltransactions are denominated in South African Rand with local vendors.

Price risk

TheQCTOisnotexposedtopriceorcommoditypriceriskastheydonotcarryanyinvestments.Cashincludescashwithcommercialbanks.Thesecashequivalentsaresubjecttoaninsignificantriskofchangeinvalue.

Cash flow and fair value interest rate risk

TheQCTOdoesnotcarryanysignificantinterestbearingassets,thereforetherevenueandoperatingcashflowsarenotsubstantiallydependedonchangesinmarketinterestrates.AstheQCTOdoesnothavesignificantinterestbearingliabilities,theexpenseandcashflowsarenotsubstantiallydependentonchangesinmarketinterestrates.







TheQCTOexposuretointerestrateriskandeffectiveinterestratesonfinancialinstrumentsatreportingdateareasfollows:

Effectiveinterest rate

Subject to interest rate movement: Floating

R’000Non-interest bearing

R’000Total

R’000

Year ended 31 March 2013

Current financial assets 3,18% 24 662 129 24 792

Cash and cash equivalents 3,18% 24 662 - 24 662

Deferred expenditure N/A - 129 129

Current financial liabilities N/A - 5 648 5 648

Trade and other payables N/A - 5 648 5 648

Year ended 31 March 2012

Current financial assets 3,71% 17 101 - 17 101

Cash and cash equivalents 3,71% 17 101 - 17 101

Deferred expenditure N/A - - -

Current financial liabilities N/A - 2 680 2 680

Trade and other payables N/A - 2 680 2 680







Interest rate sensitivity

TheQCTOissensitivetothemovementsinthemoneymarketreporatewhichistheprimaryratetowhichthecashbalanceattheregisteredfinancialinstitutionis exposed. The rates of sensitivity are based on management’s assessment of possible change to the interest rates and is formulated on a 100 basis point movement.IftheMoneyMarketRepoincreasedanddecreasedatyearendby100basispoints(2012:100basispoints)respectively,thentheinterestearnedontheABSAbankaccountwouldhaveincreasedbyR259000(2012:R22000)anddecreasedbyR259000(2012:R22000)respectivelyindicatinganoverallinterestriskratesensitivityof7.74%.

Credit risk

Financialassets,whichpotentiallysubjecttheQCTOtoconcentrationsofcreditriskconsistprincipallyofcashandcashequivalentsandaccountsreceivable.Creditriskarisesfromtheriskthatacounterpartymaydefaultornotmeetitsobligationstimeously.

TheQCTOmanagementlimitsitstreasurycounter-partyexposurebyonlydealingwithwell-establishedfinancialinstitutionsapprovedbyNationalTreasury.

TheQCTOdoesnothaveanymaterialexposuretoanyindividualorcounter-party.TheQCTO’sconcentrationofcreditriskislimitedtotheindustryinwhichtheQCTOoperates.NoeventsoccurredintheindustryduringthefinancialyearthatmayhaveanimpactontherecoveryofTradeandotherreceivables.







Thefundsmaximumexposuretocreditriskisequaltothetotalvalueofthefollowingassets:

Rated Non-rated Total

2013 R’000 R’000 R’000

Cash and cash equivalents 24 662 - 24 662

Deferred expenditure 129 - 129

Total 24 792 - 24 792

2012

Cash and cash equivalents 17 101 - 17 101

Deferred expenditure - - -

Total 17 101 - 17 101







Liquidity risk

TheQCTOmanagesliquidityriskthroughpropermanagementofworkingcapital,capitalexpenditureandactualversusforecastedcashflows.Adequatereserves and liquid resources are also maintained.

Forecast liquidity reserve as of 31 March 2013 is as follows:

2014 2015 2016

R’000 R’000 R’000

Opening balance for the period 24 662 21 482 21 482

Operating proceeds 21 198 22 263 23 049

Operatingoutflow (24 378) (22 263) (23 049)

Closing balance for the period 21 482 21 482 21 482

Thetablebelowanalysesthefinancialliabilitiesthatwillbesettledonanetbasisintotherelevantmaturitygroupingsbasedontheremainingperiodatbalancesheet date to the contractual maturity date:

Less than 1 year Total

At 31 March 2013 R’000 R’000


Less than 1 year Total

At 31 March 2012 R’000 R’000







Notes 2012/13 2011/12

R’000 R’000

14. CONTINGENT LIABILITIES

The following contingent liabilities exist:

Retention of accumulated surplus 14.1 5 354 7 786

5 354 7 786

14.1 TheQCTOappliedfortheretentionofthenetsurplusforthe2013financialyearintermsofsection53(3)ofthePFMAfromNationalTreasuryduringthefirstquarterofthe2013/14financialyear.ThisapprovalhasnotyetbeengrantedbyNationalTreasury.Acontingentliabilityforthetotalaccumulatedsurplusistherefore disclosed.






15. RELATED PARTY TRANSACTIONS

15.1 RELATIONSHIPS

Allrelatedpartytransactionsthatoccurredduringthefinancialyearwereatarms-lengthandinthenormalcourseofbusinessinaccordancewiththemandateof the QCTO.

- Department Department of Higher Education and Training (DHET)

- Entities under the department NationalSkillsFund(NSF) Agriculture Sector Education and Training Authority (AGRISETA) BankingSectorEducationandTrainingAuthority(BANKSETA) Culture, Arts, Tourism, Hospitality and Sports Educational and Training Authority (CATHSSETA) Chemical Industries Education and Training Authority (CHIETA)Construction Education and Training Authority (CETA) Education, Training and Development Practices (ETDP) Energy Sector Education and Training Authority (EWSETA) Financial and Accounting Services Sector Education and Training Authority (FASSET) Food and Beverages Manufacturing Industry Sector Education and Training Authority (FOODBEV)






15.1 RELATIONSHIPS (Continued)

- Entities under the department Fibre Processing Manufacturing Sector Education and Training Authority (FP&M SETA) Health and Welfare Sector Education and Training Authority (HWSETA) Insurance Sector Education and Training Authority (INSETA) Local Government Sector Education and Training Authority (LGSETA)Media, Advertising, Information and Communication Technologies Sector Education and Training Authority (MICT) MiningQualificationsAuthority(MQA)Manufacturing, Engineering and Related Services Sector Education and Training Authority (MERSETA)Public Service Sector Education and Training Authority (PSETA) Safety and Security Sector Education and Training Authority (SASSETA)Services Sector Education and Training Authority (SERVICES)Transport Education and Training Authority (TETA) Wholesale and Retail Sector Education and Training Authority (W&RSETA)SouthAfricanQualificationsAuthority(SAQA)






15.2 RELATED PARTY TRANSACTIONS AND BALANCES

Related partyExpenses paid during 2012/13

Trade and other Payables balance at 31 March 2013

Pre-paid expense balance at 31 March 2013

Department of Higher Education and Training (DHET) - Goods and Services reimbursed - 4 810 129

SouthAfricanQualificationsAuthority(SAQA) 442 167 -

* QCTO receives grant income from the DHET. QCTO is one of the DHET’s public entities and therefore submit reports to the DHET

*TheQCTOhasbeenestablishedthroughtheSkillsDevelopmentAct.HowevertheNationalQualificationsActprescribestheroleandfunctionsofQualityCouncils of which the QCTO is one of the three Quality Councils. SAQA oversee the Quality Councils.






15.3 KEY MANAGEMENT PERSONNEL

- Members of senior management ChiefExecutiveOfficer

Chief Director

Director

Number of individuals

2012/13R’000

2011/12 R’000

Short term employee benefits

Post level 15

ChiefExecutiveOfficer 1

Basic salary and social contributions 864 617

Bonuses and performance related payments - -

Othershorttermemployeebenefits 181 412

Total 1 045 1 029






Number of individuals

2012/13R’000

2011/12 R’000

15.3 KEY MANAGEMENT PERSONNEL (Continued)


Post level 14

Chief Director 2

Basic salary and social contributions 616 -


Othershorttermemployeebenefits 81 -

Total 697 -


Post level 13

Director 1

Basic salary and social contributions 343 -


Othershorttermemployeebenefits 56 -

Total 399 -






15.3 KEY MANAGEMENT PERSONNEL (Continued)

PersonnelremunerationispaidbytheDepartmentofHigherEducationandTraining(DHET)andclaimedbackfromtheQCTOastheEntityiscurrentlyinprocess of developing systems to accommodate its operational requirements as a Schedule 3A Public Entity.

ThetwoChiefDirectorpostswerefilledfrom1November2012.

TheDirectorpostwasfilledfrom1October2012.

Notransactionswereconductedwithanyfamilymembersofkeymanagementpersonnelduringthecurrentorpreviousperiodunderreview.

16. DEFINED CONTRIBUTION PLAN

TheQCTOprovidesforretirementbenefitsforallitspermanentemployeesthroughadefinedcontributionschemetotheGovernmentEmployeesPensionFund(GEPF) that is subjected to the Pension Funds Act, 1956 as amended. In terms of the Pension Funds Act the fund is not required to be actuarially valued.

The QCTO’s liability is limited to its considerations made. There are 16 employees who are members of the GEPF in which the QCTO’s contribution is 13% of pensionable emoluments.

Notes 2012/13 2011/12

R’000 R’000

Contributions for the year included in employee cost 4 792 342






Notes 2012/13 2011/12

R’000 R’000

17. IRREGULAR EXPENDITURE

Reconciliation of irregular expenditure

Opening balance - Previous year - -

Add: Irregular expenditure - Current year 771

Less: Amounts condoned (771)

Less: Amounts not recoverable (not condoned) - -

Irregular expenditure awaiting condonation 17.1 - -

17.1 Analysis of irregular expenditure per age classification

Current year 771 -

Prior years - -

Total 17.2 771 -






Notes 2012/13 2011/12

R’000 R’000

17. IRREGULAR EXPENDITURE (Continued)

17.2 Details of irregular expenditure

Incident Number of cases

Non-compliance to requirements of supply chain management

Opening balance - Previous year - - -

Add: Irregular expenditure - 2012/13 1 771 -

Less: Amounts condoned - 2012/13 (771) -

Total 1 - -

Allocation of bids:

Current year irregular expenditure of R771 032.81 (2011/2012: R0) consists of payments made relating to bids that were awarded in contravention of the competitive bidding process as required by Treasury Regulation 16A 6.4 and National Treasury Practice Note 8.

Condonement of irregular expenditure:

The Accounting Authority granted condonement of R771 032.81 (2011/12: R0) on 23 November 2012.






18. DONATIONS RECEIVED IN KIND

Notes 2012/13 2011/12

R’000 R’000

Quantifiable 18.1 - 775

Unquantifiable 18.2 - -

Total - 775

18.1 Quantifiable

2011/12

Duringthe2011/12financialyear,theQCTOreceivedservicesinkindamountingtoapproximatelyR90000.00fromtheSwissSouthAfricanCo-operationinitiative. These funds were applied to fund two funding experts and to support the participation of an expert in the TVET conference on behalf of the QCTO.

Duringthe2011/12financialyear,theQCTOreceivedservicesinkindamountingtoapproximatelyR685000.00fromGIZ.Thesefundswereappliedtofundvarious technical experts and to support the participation of two experts from BIBB in the TVET conference on behalf of the QCTO.






18. DONATIONS RECEIVED IN KIND (Continued)

18.2 Unquantifiable

2012/13

Duringthecurrentfinancialyear,theQCTOreceivedunquantifiableservicesinkindfromGIZ.TheseservicesincludedthedevelopmentandtestingofawebsitefortheQCTOandtheprovisionofstafftoconductworkshopsandassisttheQCTOwiththeestablishmentofsystemsforthedevelopmentandassessmentofqualifications.

2011/12

Duringthe2011/12financialyear,theQCTOreceivedunquantifiableservicesinkindfromTheEuropeanUnionthroughtheDHETandincollaborationwiththeNationalSkillsAuthority.TheseservicesincludedaSocialDialogueConferencewheresevencountriespresentedontheirVocationalTrainingSystems.

Duringthe2011/12financialyear,theQCTOreceivedunquantifiableservicesinkindfromIrishAid.Theseservicesincludedthefinancingoftravelandaccommodation of the European Union funded experts for the TVET conference.

Duringthe2011/12financialyear,theQCTOreceivedunquantifiableservicesinkindfromAusAid.Theseservicesincludedsupportingtheparticipationofanexpert in the TVET conference.

19. NOTES TO THE STATEMENT OF COMPARISON OF BUDGET AGAINST ACTUAL AMOUNTS

19.1 REVENUE

Thevarianceof4%inRevenueresultsfromthereceiptoffinanceincomeearnedontheABSAbankaccountnotbeingbudgetedfor.






19. NOTES TO THE STATEMENT OF COMPARISON OF BUDGET AGAINST ACTUAL AMOUNTS (Continued)

19.2 EMPLOYEE COSTS

The variance of (37)% results from the delayed recruitments and appointments of the following budgeted positions: •Two(2)ChiefDirectorsChiefDirectorQualificationsManagementandChiefDirectorCorporateServiceswereonlyappointedmidofthe3rdquarter.

• The position of Director for IT was only interviewed on the 19th of March 2013. Appointment will be finalizedsubsequenttoreceiptofthecompetencyassessmentresults.Itisanticipatedthatthe successfulcandidatewillcommencenotlaterthan1June2013. •TheappointmentofADFinancepositionwasfinalizedinMarch2013withtheincumbenthaving commenced duties on 1 April 2013. •TheDDGovernanceadvertisedpositionwasonlyfinalizedinMarch2013.Incumbentcommenced on 1 April 2013 •PositionofSeniorPractitioner(OQMSupport)wasfinalizedinMarchwiththeincumbent commencing on 1 April 2013 •5DHETsecondedofficials(budgetedwithinQCTO2012/13)whodidnotacceptoffersoftransfers toQCTOrevertedbacktotheDHETon31stJanuary2013.ThesituationleftQCTOwith5vacant positionswhichneedtobefilled.ThesaidpositionscouldonlybeadvertisedduringMarch2013.

19.3 GOODS AND SERVICES

The variance of (68)% results from the planned procurement of the following goods and services being delayed as a result of several postponements of the DHETbidcommitteesittingstoconsiderthespecificationsandTermsofReferencesasperSCMpolicyprovisions: • Internal Audit Services • Public Relations Services • IT Master Systems Plan • Pastel Evolution and CaseWare Accounting Systems






19. NOTES TO THE STATEMENT OF COMPARISON OF BUDGET AGAINST ACTUAL AMOUNTS (Continued)

19.4 CAPITAL EXPENDITURE

The variance of (44)% results from delays in the SCM process to acquire assets.