REPUBLICO FS OUTHAFRICA...01 April 2014 • College of Cape Town open Day, Cape Town: 11 & 12 April 2014 • DHET Career Expo False Bay College Mitchells Plain, Cape Town 23 April

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REPUBLIC OF SOUTH AFRICA

Publisher FP&M SETA Forum1B,2ndFloor,BraamparkOfficePark, 33 Hoofd Street, Braamfontein, Johannesburg, 2001

Tel: +27 (0) 11 403 1700 Fax: +27 (0) 11 403 1718

E-mail: [email protected] Website: www.fpmseta.org.za

LayoutandDesign Cre8orGlobalCommunicationsccPrinter Business PrintReport Number RP196/2015ISBN Number 978-0-621-43744-7

ForsubmissionintermsofthePublicFinanceManagementAct,1999(ActNo.1of1999).

AnnuAl RepoRt of the fp&M SetA 01 ApRil 2014 to 31 MARch 2015

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Honourable Minister Nzimande and Honourable Deputy Minister Manana, it is my privilege and pleasure to present to you the Annual Report of the Fibre Processing & Manufacturing Sector Educationand Training Authority (FP&M SETA), for the financial year ended March2015.

OnbehalfoftheFP&MSETABoardandstaffIwanttothankyouandthe Department of Higher Education and Training for your supportduringthereportingperiod.

Honourable Minister of Higher Education and Training, Dr Blade Nzimande

Honourable Deputy Minister of Higher Education and Training, Mr Mduduzi Comfort M anana

Ms Felleng YendeChiefExecutiveOfficer:FP&MSETA

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contentS

GENERAL INFORMATION ........................................................................................ 41. Publicentity’sgeneralinformation .......................................................................................................................................52. Listofabbreviations/acronyms .............................................................................................................................................53. Foreword by the Chairman ...................................................................................................................................................64. ChiefExecutiveOfficer’soverview ........................................................................................................................................85. StatementofresponsibilityandconfirmationofaccuracyfortheAnnualReport .............................................................166. Strategicoverview ..............................................................................................................................................................17

6.1. Vision ........................................................................................................................................................................176.2. Mission .....................................................................................................................................................................176.3. Values .......................................................................................................................................................................17

7. Legislativeandothermandates ..........................................................................................................................................178. Organisationalstructure .....................................................................................................................................................189. FP&MSETAOffices ..............................................................................................................................................................19

PERFORMANCE INFORMATION .......................................................................... 221. Auditor’sReport:predeterminedobjectives ......................................................................................................................232. Situationalanalysis .............................................................................................................................................................23

2.1. Servicedeliveryenvironment ...................................................................................................................................232.2. Organisationalenvironment .....................................................................................................................................262.3. Keypolicydevelopmentsandlegislativechanges ....................................................................................................262.4. Strategicoutcome-orientedgoals ............................................................................................................................27

3. Performanceinformationbyprogramme/activity/objective ............................................................................................283.1. Programme1:Establishingacredibleinstitutionalmechanismforskillsplanning ..................................................283.2. Programme2:Increasingaccesstooccupationallydirectedprogrammes ..............................................................303.3. Programme3:PromotingthegrowthofaresponsivepublicTVETcollegesystem .................................................383.4. Programme4:Addressingthelowlevelofyouthandadultlanguageandnumeracyskillsto

enableadditionaltraining ........................................................................................................................................413.5. Programme5:Encouragingbetteruseofworkplace-basedskillsdevelopment......................................................443.6. Programme6:Encouragingandsupportingcooperative,smallenterprises,workerinitiated,

NGO,andcommunitytraininginitiatives .................................................................................................................473.7. Programme8:Buildingcareerandvocationalguidance ..........................................................................................49

4. Revenuecollection ..............................................................................................................................................................544.1. Capital investment ...................................................................................................................................................54

GOVERNANCE......................................................................................................... 551. Introduction ........................................................................................................................................................................562. Portfoliocommittees ..........................................................................................................................................................563. Executiveauthority .............................................................................................................................................................564. TheAccountingAuthority/Board ......................................................................................................................................565. Risk management ...............................................................................................................................................................626. Internalauditandauditcommittee ....................................................................................................................................637. Compliancewithlawsandregulations ...............................................................................................................................648. Fraudandcorruption ..........................................................................................................................................................659. Minimisingconflictsofinterest...........................................................................................................................................6510. Codeofconduct ..................................................................................................................................................................6511. Health, safety, and environmental issues ...........................................................................................................................6512. Socialresponsibility ............................................................................................................................................................6613. AuditCommitteereport .....................................................................................................................................................67

HUMAN RESOURCE MANAGEMENT ................................................................... 681. Introduction ........................................................................................................................................................................692. Humanresourceoversightstatistics ...................................................................................................................................70

FINANCIAL INFORMATION ................................................................................... 741. Report of the external auditor ............................................................................................................................................752. Annualfinancialstatements ...............................................................................................................................................78

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ApARt A: GeneRAl infoRMAtion

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pARt A: GeneRAl infoRMAtion

RegisteredName: FibreProcessingandManufacturing (FP&M)SETA

PhysicalAddress: Forum1B,SecondFloor, BraamparkOfficePark,33HoofdStreet

Braamfontein, Johannesburg 2001Postal Address: Po Box 31276 Braamfontein 2017Telephone Number: +27 (0) 11 403 1700Fax Number: +27 (0) 11 403 1718Email Address: [email protected] Address: www.fpmseta.org.za

Report Number: RP196/2015ISBN Number: 978-0-621-43744-7

2. LIST OF ABBREVIATIONS/ACRONYMS

ACRONYM FULL DESCRIPTION

AET AdultEducationandTrainingAGSA Auditor-GeneralofSouthAfricaAFS AnnualFinancialStatementsAPP AnnualPerformancePlanATR Annual Training Report CBO Community-BasedOrganisationCE ChiefExecutiveCEPPWAWU ChemicalEnergyPaperPrintingWoodand

Allied Workers UnionCEO ChiefExecutiveOfficerCFO ChiefFinancialOfficerCOSATU CongressofSouthAfricanTradeUnionsCPD CorporationforPublicDepositsCTFL Clothing,Textiles,FootwearandLeatherDAFF DepartmentofAgriculture,ForestryandFisheriesDHET DepartmentofHigherEducationandTrainingDUT DurbanUniversityofTechnologyETQA EducationandTrainingQualityAssuranceEXCO ExecutiveCommitteeFIETA ForestryIndustriesEducationandTrainingAuthorityFP&M FibreProcessing&ManufacturingGRAP GenerallyRecognisedAccountingPracticeHET HigherEducationandTrainingHR HumanResourcesIPAP III IndustrialPolicyActionPlanIIIIT InformationTechnologyKZN KwaZulu-NatalMAPPP Media,Advertising,Publishing,

PrintingandPackagingMIS ManagementInformationSystemMOA Memorandum of AgreementMOU Memorandum of UnderstandingNAMB NationalArtisanModeratingBody

ExternalAuditors: Auditor-GeneralofSouthAfrica(AgSA) SecondFloor,LefikaHouse, 300 Veale Street, Brooklyn, Pretoria, 0011Bankers: FirstNationalBank 8 Rydall Vale Park, Douglas Saunders Drive,

LaLucia,4051 Nedbank 90BramFischerRoad,Kingsmead,

Durban, 4001 Standard Bank 51 old Main Road, Pinetown, 3601 CorporationforPublicDeposits(CPD) C/oSouthAfricanReserveBank 370 Helen Joseph Street, Pretoria, 0002

ACRONYM FULL DESCRIPTION

NEET NotinEmployment,EducationorTrainingNGO Non-GovernmentalOrganisationNOPF NationalOccupationalPathwaysFrameworkNPO Non-ProfitOrganisationNQF NationalQualificationsFrameworkNSDS NationalSkillsDevelopmentStrategyNSFAS NationalStudentFinancialAidSchemeNCV NationalCertificateVocationalOFO OrganisingFrameworkforOccupationsPASA PublishersAssociationofSouthAfricaPFMA PublicFinanceManagementAct,1999

(ActNo1of1999)PIVOTAL Professional,Vocational,TechnicalandAcademic

LearningQCTO QualityCouncilforTradeandOccupationsRPL RecognitionofPriorLearningSACTWU SouthernAfricanClothingandTextile

Workers UnionSAQA SouthAfricanQualificationsAuthoritySARS SouthAfricanRevenueServiceSATU SouthAfricanTypographicalUnionSCM Supply Chain Management SDL Skills Development Levy SETA SectorEducationandTrainingAuthoritySMME Small,Medium,andMicroEnterprisesSSP SectorSkillsPlanTVET TechnicalandVocationalEducationand

Training UIF UnemploymentInsuranceFundW&R SETA WholesaleandRetailSectorEducationand

Training Authority WIL Work Integrated Learning WSP WorkplaceSkillsPlan

1. PUBLIC ENTITY’S GENERAL INFORMATION

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3. FOREWORD BY THE CHAIRMAN

Eventhoughthemanufacturingsector inSouthAfricahascontinuedtofacechallengesofcompetitivenesswithitsworldwidecounterparts,the South African Government has tackled the issues head on andhasadoptedpositive,rigorousprogrammes,duringtheperiodunderreview. Thesehave included the likesof the IndustrialPolicyActionPlan (IPAP) (2014/15 - 2016/17) and the National Development Plan, both of which are aimed at revitalising and sustaining themanufacturingsector.

The FP&M SETA’s crucial role in leading the revival and economicsustainabilityofits13sub-sectors,throughfocusedskillsdevelopment,continues to be a dynamic focus on the South African economiclandscape. The SETA continues to embrace opportunities to co-ordinate and facilitate key partnerships between industrystakeholders, training&education institutions, andGovernment. Inaccordancewithitsskillsdevelopmentmandate,theFP&MSETAhaspersistedwiththeimplementationofskillsdevelopmentinterventionsthroughoutthecountry.

Keytothesuccessoftheseinterventionsoverthepast12monthshasbeen empirical research activities undertaken in collaboration withourresearchpartner,WitsUniversity,toaccuratelyidentifythescarceandcriticalskillsthatwereneededbyoursub-sectors.ATrackingandTracingstudywas implemented todetermine the impactof learningprogrammes and the social return on investment. In addition, thestudywasundertaken toobtain informationonbestpracticesbeingimplementedinall13sub-sectors.

Theresultantknowledgewasessential intheformulationofefficientstrategies needed to address socio-economic challenges facing thesector and tomaximise the impact of skills development initiativesonthelivesofthemostvulnerablegroupsincluding,theunemployedyouth;peoplelivinginruralareas;peoplewithdisabilities;andwomen.Thisbroadenedparticipation landscape includedpreviouslyexcludedpeople. In addition, during the period under review, engagementsoften tookplacewith the sub-sectors to develop industry strategiesthat would ensure the growth of industry in terms of productivity,competitivenessandsustainabilityinthemediumtolongterm.

TheFP&MSETAhasbuiltastrongstrategic foundationoverthefirstfour years of its existence, and the period under review has beenessential inexpandingstrategicrelationswithcaptainsof industry inoursub-sectorsandwithemployerandlabourrepresentativebodies,governmentdepartmentsandinstitutions.TheseproactivestakeholderengagementshavepositionedtheFP&MSETAasacatalystinensuringsynergy between the skills requirements of the 13 sub-sectors, andlearnersfashionedbyeducationandtraininginstitutions.

TheFP&MSETAalsoplayedaleadingroleinthedevelopmentoffit-for-purposeoccupationally-directedqualificationsthatwillbeprovidedbythese institutions. These qualifications would ensure that learnersacquire the relevant, current, theoretical and practical knowledgecomplementedbyworkexperiencethatisalignedtotherequirementsandperformancestandardsofindustry.

The FP&M SETA’s drive, during the period under review, has beentowards producing a “highly-skilled world-class” workforce, asencapsulated in our vision. This vision has been widely supportedby industry stakeholders who turned their workplaces into training

Mr Sipho NgidiChairman of the FP&M SETA Board

The FP&M SETA has built a strong strategic foundation over the first four years of its existence...

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spaces,andinvestedextensiveresourcestoensurethatoccupationally-directedwork-integratedlearningprogrammesareofferedtounemployedgraduates.StrategicprojectswereimplementedbytheSETA,whichresultedinthesuccessfulplacementandpermanentabsorptionofunemployedgraduatesfromTVETandhighereducationinstitutions,addingvaluetotheirworkplacesandbroadercommunity.

Relevantskillsdevelopmentinitiativeshavecontinuedtoplayacrucialroleinensuringthecompetitivenessofoursector,andkeepingabreastwithnew technological advancesand internationalbestpractice.TheFP&MSETA interventionshavebeendesigned toensure that learnersacquirecutting-edgeskillsthatarerecognisedandrequiredbybothlocalandinternationalindustry.

During thereportingperiod, theFP&MSETABoardentered intopartnershipdiscussionswith theMinistryofHigherEducationandTraining,UmgungundlovuTVETCollege,thecommunityofRichmondandtheMethodistChurch,tolaunchanoteworthyskillsdevelopmentinterventioninruralKwaZulu-Natal.Thisinnovativeproject,tothetuneofR25million,wasapprovedbytheFP&MSETABoard,toestablishacommunityskillscentreintheruralvillageofIndaleni,intheRichmondMunicipality.

TheFP&MSETABoardwouldliketoplaceonrecorditsgratitudetotheHonourableMinisterofHigherEducationandTraining,DrBladeNzimande,for launching theRichmond-Indaleni Community Skills Centre. This intervention is aimedat providingmuchneededoccupationally-directedprogrammestounemployedyouthinthearea,andtofacilitatetheplacementoftheselearnersinworkplacesinthesurroundingdistricts.ThisinterventionisoneofmanysuccessfulpartnershipsthattheFP&MSETAenteredintoduring2014/15.

Other interventions included partnerships with employers, public and private providers, as well as community-based organisations, wherePIVoTAL and non-PIVoTALlearninginterventionscouldbeimplementedacrossallsub-sectorsandgeographicalareas.Thelearninginterventionsincludedskillsprogrammes,apprenticeshipsandworkintegratedlearningexperiences.

Iamextremelyproudtonotethatsincetheestablishmentin2011,theFP&MSETABoardhasapprovedinexcessofaR1billionindiscretionarygrant funding for PIVoTAL and non-PIVoTALlearningprogrammeinterventions.Asaresult,theSETAhasdisbursedanestimatedR534milliontowardstheimplementationofskillsdevelopmentprogrammesaimedatempoweringdesignatedgroupsincludingunemployedyouth,womenandpeoplewithdisabilities.

IextendmygratitudeandappreciationtomyfellowBoardMembers,themembersoftheAdvisoryCommitteesandtheAuditCommittee,fortheirinvaluablecontributionsduringthisfinancialyear.TheirknowledgeandskillshavecontributedenormouslytothecommendablesuccessthattheFP&MSETAhasachieved,andtheirleadershiphascatapultedustoevengreaterheights.

IwouldespeciallyliketothanktheCEOoftheFP&MSETA,MsFellengYende,forsteeringtheshipintocalmerwatersduringaturbulentperiod.Herunstintingcommitmentanddedicationtoleadinganorganisationthataspirestoultimateexcellence,iscommendable.Mythanksalsogotothemanagementandstaff,fortheirrelentlesseffortstocontinuallytransformtheFP&MSETAintoanevenmorecredibleandmoreeffectiveskillsdevelopmentorganisationthantheyearbefore.

Inmanyrespectsthe2014/15yearhasbeenagoodyearofsolidgrowth.Wehaveforgedstrongerstakeholderrelations,whichhasresultedintheextensionofourskillsdevelopmentservicestomorebeneficiaries.OurresearchpartnershipwithWITSREAListhrivingandisenhancingourintelligenceonskillsdevelopmentinternationally.Iamconfidentthatwehavemet,andinsomeinstancesexceeded,theexpectationsofourstakeholders.Weareeagertofurtherpursueourmandatetomaximiseskillsdevelopmentforasustainablefuturetothebenefitofallofoursub-sectorsin2015/16.

Mr Sipho NgidiFP&M SETA31 July 2015

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4. CHIEF EXECUTIVE OFFICER’S OVERVIEW

Introduction

Thejourneywehavetakensince inceptionin2011,whentheFP&MSETAcameintobeing,totheroadwearenowtravelling,hasbeenanadventurous, fulfilling, arduous and rewarding one. Like any routetravelled,thevoyagealwaysrevealsunexpectedglitchesalongthewayaswell asunanticipated inspirationaloccurrences, and it is only theresolutecommittedtravellerthatisspurredonanddrivenforwardtotheplanneddestination.AndinthisinstanceitistheFP&MSETA.

Tofullyunderstandthehallmarkofthe2014/2015successes,weneedtogobackandtrackthesignificanteventsthathavetakenplaceoverthepastfouryears.PostamalgamationchallengesoftheFP&MSETAnecessitateda comprehensiveSWOTanalysis, aswell asa reviewofthebusinessstructuresothatacompleteturn-aroundofefficiencyandservicedeliverytoourstakeholders,couldtranspire.

The implementation of the new businessmodel paved the way forthe streamlining of the SETA’s operations and processes. This hasresultedintheestablishmentofabestpracticeorganisationthathasmet and exceededorganisational objectives, performance standardsand stakeholder expectations,whilst simultaneously observing goodcorporate governance and prudent financial management. Withsupport from the FP&M SETA Board and stakeholders, the new business modelhashadapositiveimpactnationallyontheSETA’sstanding intheFP&Msector.

Ourneworganisational structure anddesignwere critical in guidingandsupportingorganisationalexcellenceaswellasensuringaresults-driven and customer-centric approach with increased productivity.The key principle to driving re-organisation has been performanceoptimisation. Aligned to this principle, strategic staff appointmentswere finalised and the SETA’s operations were stabilised whichpaved the way for the effective implementation of the FP&M SETA mandate, namely:

• toprovideskillsdevelopmentservicestotheclothing,footwear,forestry, furniture, general goods, leather, packaging, printmedia,printing,publishing,pulpandpaper,textilesandwoodproductssectors

• toimplementtheobjectivesoftheNationalSkillsDevelopmentStrategy(NSDSIII)andtheFP&MSETA’sfive-yearStrategicPlan

• toensurethatthecriticalorscarceskillsthatareneededtobuildthecapacityofthesector,tobecomeeconomicallysustainableand globally competitive, are acquired by the requisiteindividuals.

Byleadingfromthefront,theBoard,CEOandexecutivemanagementteam have made expedient progress in strengthening the currentgovernance structures. This has led to continued good corporategovernance,strongleadershipandsoundfinancialmanagement.

Ms Felleng YendeChief Executive Officer

...the Board, CEO and executive management team have made expedient progress in strengthening the current governance structures.

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Sofar,themostsignificantoutcomeofimplementingthenewbusinessmodelhasbeenamarkedimprovementofapproximately76%intheOverallPerformanceoftheFP&MSETAsinceinception.

49

%

64

%

80

%

86

.2%

FP&M SETA Performance 2011 - 2015

2011/12 2012/13 2013/14 2014/15

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

38 5

5

128

313

Discretionary Grant (R’000)

2011/12 2012/13 2013/14 2014/15

350

300

250

200

150

100

50

0

TheDiscretionaryGrantExpenditurehasincreaseddramaticallybyapproximately724%overthepastfouryears,withasubstantialincreaseof145%sincetheimplementationofthenewbusinessmodelin2014/15.

Learning Programme Implementation (Since Inception)

1,79

6

2011/12

1,9

68

2012/13

4,5

86

2013/14

3,3

19

2011/12

3,8

75

2012/13

8,4

60

2013/14

3,7

72

2014/15

10,7

52

2014/15

12,000

10,000

8,000

6,000

4,000

2,000

0

Total Learners Entered Total Learners Completed

Learner registrations have increased by a massive 224% since 2011/12. This is predominantly attributed to the increase in discretionarygrant expenditure as a result of the new discretionary grant disbursement strategy and efficient projectmanagement that were informedand underpinned by the new business model. The above graph also demonstrates a pleasing increased participation by industry in skills developmentinitiatives.

Duringtheyearunderreview,interactionswithprominentstakeholdersintheFP&Msectorwereintensifiedinordertofacilitateongoingsupportfromthesectorforhigh-levelstrategicandinnovativeSETAinitiativesandtoobtaincurrentinformationonthestateoftheindustry,opportunitiesforco-operationandchallengesexperiencedwithregardstoskillsdevelopment.

The FP&M SETA stakeholder perception survey conducted during the financial year shows a pronounced shift of perception among thestakeholdersbetween the2013and2014 calendar years. This is indicativeof thepositive impact that the customer-centricbusinessmodelhashadonstakeholders’experiencewithregardstotheSETA,whichdemonstratesanoteworthyincreaseofbusinessconfidenceamongstourstakeholdersinthesector.

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2013 vs 2014 Stakeholder Perception Survey Results

TESTED COMPONENT 2013 2014

RESPONDENTS 59 responses 124 responses

CustomerRelations Unsure Agree

GrantDisbursementApplication&Payment Unsure Agree

QualityAssurance Disagree Agree

Communication&StakeholderEngagement Unsure Agree

SectoralSupport Unsure Agree

CorporateGovernance Unsure Neutral - bordering improvement

Inadditiontothecustomersatisfactionsurvey,acomprehensiveTrackingandTracingstudywasconductedtomeasurethesuccessofLearningProgrammeImplementation(learnershipsandapprenticeships)intheFP&Msector,andtheimpactthereofonlearnersandemployers.

The resultsof theTrackingandTracingStudywereextremelypositiveand revealed thatbyengaging ina learnershiporapprenticeship, theemployabilityoflearnersandtheirearningpotentialwasgreatlyimproved,aswellasthevaluetheyaddedtotheworkplace.

In a snap-shot, the study has further revealed:

• unemploymentamongstpreviouslyunemployedlearnersonlearnershipshasdecreasedfrom72%to44%• learnershipspositivelyinfluencedthecareerpathsofemployedlearners,with28%ofemployedapprenticesand30%ofemployedlearners

receivingapromotionorcareeradvancementoncompletionoftheprogrammes• 71%ofunemployedlearnerswhohadgraduatedfromapprenticeshipprogrammes,havefoundemployment• theincomeofthosewhowereemployedonenteringanapprenticeship,morethandoubledaftercompletingtheapprenticeship• learnershipsarebridgingmechanismstoovercomebasicskillsgaps• employershaveclaimedthatlearnershipgraduatesdemonstrateimprovedbasiceducationandotherinter-personalskills• studentswhohavecompletedtheapprenticeshipprogrammeconcurthat ithashadapositiveimpactontheirpersonaldevelopment,

especiallytheircommunicationskills,self-esteemandself-confidence• thosestillunemployed,remainpositiveandsomeareusingtheirnewskillsintheinformalentrepreneurialsectortocreateanincomefor

themselves• 2%oflearnershipgraduatesareself-employed• anadditional2%continuetostudyfurther• 4%ofqualifiedartisanshaveappliedtheirskillstostarttheirownbusinesses.

TheTrackingandTracingStudyhasprovidedtheFP&MSETAwithvaluableinsightsintotheimpactofoccupationallydirectedprogrammesinthesector.Whilstemployersandlearnersdofacechallengesduringthecourseoftraining,suggestionshavebeenmadebybothsidestoimproveandfinetunespecificareas.LearnershaveexpressedenormousappreciationforbeingaffordedtheopportunitiesprovidedbytheFP&MSETAtoaccessthesetraininginitiativesandthelearningexperienceshavebeendescribedasworthwhileandagatewaytoemployment,furtherlearningandentrepreneurshipopportunities.

This sentiment is shared by the FP&M SETA Board who has steadily increased discretionary spending on learnerships and apprenticeshipimplementationsince2011,onceagainshowingthesolidcommitmentoftheFP&MSETABoardtosupportfulloccupationalqualifications.

General financial review of the public entity

Thebusiness reviewhas seen the FP&MSETA’sfinancial performance improving steadilywith significant stridesbeingmade to ensure thatadequate financial and administrative controls are in place to deliver a prudent financialmanagement procedure,with strict adherence toacceptedcorporategovernancepractices,andalignmentwithNationalTreasuryregulationsandthePublicFinanceManagementAct(PFMA),1999(ActNo01of1999).

TheFinancedivisionisresponsibleforprocessingallfinancialtransactionsandisthecustodianofallfinancial information.It isthereforethedivision’s responsibility toprovideassuranceto theCEO, theBoardandAuditCommitteethat thefinancial informationprepared forAnnualFinancial Statements, annual budgets andmonthly and quarterly financial reports, is reliable and in line with generally accepted businesspractices.Thedivisionalsomanagesthecashflowandinvestmentsoftheorganisationinaccordancewiththeapprovedinvestmentpolicy.

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Revenue

Revenuereceivedin2014/15wasreportedatR362million(2013/14:R322,4million)

315

,74

2

36

2,1

48

28

1,3

62

32

2,4

18

7,8

14

4,1

08

33

,29

8

5,1

16

9,4

74

178

41927,

05

5

Revenue Collection (R’000)

400,000

300,000

200,000

100,000

0SDLIncome Penaltiesand

InterestInvestments Donor

Fundingother

RevenueTotal

2014/15 2013/14

SDL income amounted to R315,7 million (2013/14 : R281,3 million) of which R41,3 million (2013/14 : R36,6 million) was allocatedtowards administration expenditure, R86,3 million (2013/14 : R90,9 million) towards mandatory grants expenditure and R188 million (2013/14:R153,7million)towardsdiscretionaryexpenditure.SDLincomewasallocatedinlinewiththeSETAGrantRegulationswhichcameintoeffecton01April2013.

PenaltiesandinterestincomereceivedbytheFP&MSETAforlatepaymentsmadetoSARSamountedtoR7,8million(2013/14:R4,1million).TheSETAreceivedR5,1million(2013/14:R9,4million)inrespectofdonorfundingforwhichtheconditionsweremet.OtherrevenueamountedtoR178,000 (2013/14 : R419,000).

InvestmentincomeearnedduringthefinancialyeartotalledR33,2million(2013/2014:R27million).

Investment strategy

TheFP&MSETAinvestedexcessfundswiththeCorporationofPublicDeposits(CPD)asperSection(31.3.3)ofTreasuryregulations.Theaverageinterestratefortheyeartotalled5,9%.

Spending trends of the FP&M SETA

Expenses (R’000)R350

R300

R250

R200

R150

R100

R50

0

84

313

12838

38

44

2014/15 2013/14

AdministrativeExpenses

Mandatory grantExpenses

DiscretionaryGrantExpenses

Administrationexpenses

ThedisbursementsofbothadministrativeandgrantexpenditurewasconductedinaresponsiblemannerandinlinewiththebudgetapprovedbytheBoardfortheperiodunderreview.Regularbudgetreviewswereconductedandamendmentsweremadewhenrequiredwithpermissionof the Board.

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ThetotaladministrativeexpendituretotalledR38,2million(2013/14:R38,1million).

Administrationexpenditurewascontainedwithinthe10,5%thresholdforadministrativeexpenditureasaresultofstringentfinancialmanagementandtheimplementationofcostsavingmeasures.Oneofthesecostsavingmeasureswastheincreasedutilisationofeffectivevideoconferencingfacilitiesforinternalmeetingsandcommitteemeetings,therebyreducingtravelandaccommodationrequirementssignificantly.

The SETA incurred irregular expenditure totalling R1,3million (2013/14 : R1,1million) during the period under review relating to expensesincurredforservicefeespaidtoatravelagentandexpensesincurredfortheinternalauditfunction.Theseexpensesweredeemedirregularduetonon-compliancetothePPPFregulations.NationalTreasurydidnotcondonetheirregularexpenditure.

Mandatoryanddiscretionarygrantexpenses

The mandatory grant expenses totalled R84,4 million (2013/14 : R43,8 million). Disbursements totalled R44,4 million (2013/14 : R99,3 million).

During2013/14,mandatorygrantexpenseswerereducedbyaR22milliongrantdebtor,R17millionofwhichrelatedtoSappiSouthernAfricaLtd.

Duringthe2014/15financialyear,theSappiSouthernAfricaSDLcontribution(includinglastyear’sR17milliondebtor)resultedinanetpositiveamountandSappiSouthernAfricaLtdreceivedmandatorygrantsamountingtoR10million.

Theeffectoftheaboveresultedintheprovisionbeingreversedinthecurrentfinancialyear,hencetheincreaseingrantexpenses.

Mandatorygrantdisbursementswere less than thepreviousyeardue to the third tranchepayment for2014/15beingmadeafteryear-end (R24 million was paid on 02 April 2015).

DiscretionarygrantandspecialprojectsexpensestotalledR313million(2013/14:R127,8million).

TheFP&MSETAachieveda145%increaseindiscretionarygrantspendingwhichwasmostlyowingtotheapprovalofdiscretionarygrantsearlierintheyear(asdeterminedbythenewbusinessmodel).Thisenabledgrantbeneficiariestoimplementtrainingbeforeyear-end.ThebusinessmodelalsomadeprovisionforthedecentralisationofthemanagementofthediscretionarygrantimplementationprocesswhichallowedtheRegionalOfficestoactivelymonitorprogressonapprovedprojects.TheconcertedeffortsmadebytheRegionalStaffandProjectsDivisiontoassistbeneficiarieswiththeimplementationofdiscretionarygrantprojectsandtoassistwiththeclaimsprocess,contributedtotheincreasedresultsachieved.

Committedfunds

AccordingtotheSETAGrantRegulations,“itisexpectedthataSETAmusthavespentorcommitted(throughactualcontractualobligations)atleast95%ofdiscretionaryfundsavailabletoitby31Marchofeachyear,andamaximumof5%ofuncommittedfundsmaybecarriedovertothenextfinancialyear.”

‘Surplus’means a favourable residual balance in the Statement of Financial Performance for the financial year ending on 31March,minuscommitments to training of learners in programmes funded fromdiscretionary funds; ‘commitments’ in this contextmean that contractualobligationsexistattheendofthefinancialyearthatwillobligetheSETAtomakeapaymentorhonouritsagreement(writtenwithspecifictermsbetweenaSETAandthirdparty)wherebythethirdpartyundertakestomeetagreeddeliverables,inrelationtoadiscretionaryprojectforwhichaSETAwillbeobligedtomakepaymentagainstthediscretionarygrant.

ItisunderthisdefinitionthatFP&MSETAwillneedtoraisealiabilityforthe95%ofthe‘surplusportion’wherefundsfromthe2014/15periodhavebeencommitted,andalluncommittedfundsfromprioryearsurpluseswillberequestedforrollovertothenextfinancialyear.ThisrequestwillbesenttoNationalTreasury.

At theendofMarch2015,discretionary reserves totalledR480millionofwhichR451millionwascontractually committed.R25millionwasuncommittedatyear-endandapprovaltoretainthesefundshasbeensubmittedtoNationalTreasury.AnadditionalR33millionhasbeenraisedasaprovisiontobepaidtotheNationalSkillsFund(NSF).

Capacity constraints and challenges facing the FP&M SETA

TheFP&MSETAdidnotexperienceanysignificantfinancialconstraintsorchallengesduringtheperiodunderreview.Actualincomematchedthebudgetedincomeandduetotheimplementationofcostsavingmeasures,theadministrativeexpenditureremainedwithintheallocated10,5%budget.Allplannedactivitiesrequiringfundingfromtheadministrativeordiscretionarybudget,wereadequatelyprovidedfor.


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Discontinued activities / activities to be discontinued

AsummaryofprojectsthathavebeencompletedandprojectsexpectedtobecompletedduringthenextfinancialyearareincludedinNote27of the AFS.

PerformanceinthisregardhasbeenreportedinthePerformanceInformationReportonpage28topage53.

New or proposed activities

DiscretionarygrantapplicationsfortheimplementationofnewprojectshavebeenreceivedfromstakeholdersintheFP&MsectorandisawaitingBoard approval. Requests for the rollover of funds

ArequesttorolloverfundingwassubmittedtoNationalTreasuryon31May2015.TheFP&MSETAappliedtoretainfundingtotheamountofR480million(2013/14:R556million).TheresponsefromNationalTreasuryispending.

Supply Chain Management

Duringtheperiodunderreview,theSCMdivisionunderwentpositivechangesincludingtheappointmentofanewmanager,theimplementationofanadvancedelectronicprocurementsystemlinkedtothefinancialpaymentandreportingsystem,andalsotheintroductionofaninnovativetravelmanagementservicewhichincludesanonlinetravelbookingsystem.

ThedivisionfunctionedsoundlyandinaccordancewiththeapprovedFP&MSETASCMpolicy.TheSCMpolicyandproceduresarealignedtocurrentlegislationandregulationsapplicabletotheprocurementofgoodsandservices.Thepolicymakesprovisionfortheapplicationofpropercorporategovernanceprinciples,theinclusionofBEEcompliantandSMMEsuppliers,andtheongoingprocurementofcompetitivelypricedgoodsandservices.

Thepolicyfurthermakesprovisionforthesegregationofdutiesanddisclosureofinterest.

Duringtheyearunderreview,thefollowingeffectiveandsuccessfultenderswerepositivelyconcluded:

• TrackingandTracingResearchStudy• TrainingofModerators• TrainingofSkillsDevelopmentFacilitators• Coaching&MentoringFacilitatorTraining• TheEstablishmentoftheResearchChairInitiative• SkillsProgrammesTraininginGeneralForestry• InternationalLeadershipDevelopmentProgramme• AdministrationandManagementofEmployees’SocialBenefits• EventManagement(LaunchoftheRichmond-IndaleniCommunitySkillsCentreandMinisterialImbizo)

ThetotalprocurementvalueforthesetenderswasR18,7million.

Challenges experienced with Supply Chain Management

Certainteethingproblemspresentedthemselveswiththeintroductionoftheelectronicprocurementsystem.Thesehitcheswereindividuallyandsystematicallyaddressedwiththedeveloperswhichresultedinasystemthatwasoperatingoptimallybeyearend.

Staffchangesduringtheyearresultedinthedivisionbeingunder-resourcedforalimitedtimeuntilappropriatelyskilledstaffcouldberecruitedtofillthevacancies.Thedivision’scapacitywasfurtherstrengthenedthroughtheplacementofappropriatelyskilledinternscurrentlybeinghostedby the SETA while undergoing work integrated learning.

Audit report matters in the previous year

AnimpressiveunqualifiedauditopinionwasissuedbytheAGSAfor2013/14whichistestamenttotheFP&MSETAwhocompliedwithgenerallyacceptedbusinesspracticesandgoodcorporategovernance.

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Keynoteworthyauditsuccessareasforthisfinancialyear(2014/15):

• The “clean-up” of discretionary grant projects implemented by the Office of the CEO to ensure that a clinical Discretionary GrantsCommitments Registerwas presented to the AGSA proved to be an overwhelming success – the SETA has achieved best practice in this regard.

• Inthisfinancialyear,therewasadrasticreduction(60%)inthenumberofauditfindingsintheAGSA’sfinalauditmanagementreport.In2013/14thetotalnumberoffindingswere45andduringthereportingperiodunderreviewthiswasreducedto18.ThisdemonstratesasignificantimprovementinmeetingtheAGSA’sauditperformancestandards–atargetedoutcomeofthesuccessfulimplementationofthenew business model.

Plans for the future to address financial challenges

TheFP&MSETAwill continue tomanage its expenditure, bothadministrative,mandotory anddiscretionary, in a responsible andexpedientmannerthatwillessentiallyprocurefinancialstabilityandsustainabilityoftheorganisation,asper itscorebusinessmandateoutlinedintheStrategicPlanandAnnualPerformancePlan.

Events after the reporting date

TheFP&MSETABoardandmanagementarenotawareofanypostbalancesheeteventsthatmayaffecttheAFS.

Economic viability

AllSETAshavebeenestablishedforaperiodoffiveyearsending31March2016.TheFP&MSETAwillhaveafocusedstrategywhenapplyingforre-establishmentduringthenextfinancialyearending2016.

TheAnnualFinancialStatementsforFP&MSETAhavebeenpreparedasagoingconcern.

Acknowledgements

TheFP&Msectorneverceases toamazemeand Iamextremelyproudofwhat theFP&MSETAhasachievedduringour fouryear journey. Withafocused,results-drivenandhighlysuccessfulvoyagethroughuncharteredterritorywithourmanypartners,welookforwardtoanotherprosperous 12 months ahead.

During2014/15,theFP&Msector,inpartnershipwiththeFP&MSETA,implementedinnovativeskillsdevelopmentinitiativesthathaveimpactedonthelivesofthousandsofworkersandunemployedlearnersnationally.

Together,wehaveparticipatedin,andsupportedinnovativeeventssuchastheVukaniFashionAwardswhichpromoteddesignandentrepreneurialskillsfortheyouthintownshipsandruralareasandofferedauniqueandexceptionalopportunitytoyoungdesigners,wheretheycouldshowcasetheir talents.

Oursupportof theDepartmentofHigherEducationandTrainingwasseenwhenawareness forWork IntegratedLearningandplacementoflearnersamongstemployersandotherstakeholdersinKwaZulu-Natal,tookplace.Inaddition,theFP&MSETAco-hostedthelaunchoftheDecadeoftheArtisaninMpumalanga.

Successfulandfulfillingpartnershipswereforgedbetweenemployersandpublic/privatetrainingprovidersthatresultedintheimplementationofoccupationallearningprogrammesincludinglearnerships,apprenticeshipsandskillsprogrammes.Theconsequentialskillingofworkersaswellastheprovisionofunemployedyouthwithrecognisedskillsandaccesstotheworkplace,increasedtheirchancesoffutureemployment.

Wehaveengagedwithemployerandlabourorganisationsandbroughttogethercommunitiesofexpertpractitioners(CEPs)todevelopground-breakingoccupationally-directedqualificationsforregistrationwiththeQCTO.Thesequalificationshavebeenbenchmarkedagainstinternationalbest practices, and were developed with the view to produce a highly-skilled world-class workforce which will contribute to the sector’scompetitivenessinlocalandglobalmarkets.

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In partnership with community-based organisations we have supported learning interventions aimed at people with disabilities, providingthemwiththenecessarypracticalandentrepreneurialskillstobecomeeconomicallyactivecitizensintheirlocalcommunities.Throughthesepartnershipswehavealsoextendedourreachintotheruralcommunities,impactingonthelivesofmanyandcommunitieswhohistoricallyhadlittleaccesstoskillsdevelopment.

WehavesupportedourinstitutionsofhighereducationandTVETcollegesthroughbursaryfunding(channelledthroughtheNationalStudentFinancialAidScheme-NSFAS)andhaveengagedwithagenciessuchastheSouthAfricanGraduateDevelopmentAssociation(SAGDA)toplaceuniversityandcollegegraduatesinworkplacesinordertocompletetheirworkintegratedlearningrequirements.

Nowthattheorganisationisonastablefoundation,itistheBoard’svisiontofocusonthefollowingkeypriorityareasinthenewfinancialyear:

• Toimplementafully-functionalandrobustmonitoringandevaluationstrategytoenhanceprojectmanagementwithintheorganisation• To implement a focused “cluster-based” re-organised structure thatwould be informed by research to align the organisation to best

practiceandperformanceexcellence• Tostrengthenthecurrentoutcomes-basedperformancemodelthatwouldmeetauditperformancestandardsonanongoingbasis

WearealsolookingforwardtofurtherexcitingundertakingssuchastheInternationalLeadershipDevelopmentProgrammeinmanufacturing,conductedinpartnershipwiththeMassachusettsInstituteofTechnologyinAmerica,andthelaunchoftheRichmond-IndaleniCommunityCentrein the rural KZN area.

Withtheaboveinmind,IwishtothankeachandeveryindividualandorganisationthatengagedwiththeFP&MSETAduring2014/15tomakeskillsdevelopmentarealityinoursector.Icantrulyseethatthissectorisfastbecomingaleaderintheskillsdevelopmentrevolution.

Morespecifically,IwouldliketothankourBoardandChairman,MrSiphoNgidi,forsupportingoursector’seffortsthroughsensibleandresponsibledisbursementoffundingtoenableskillsdevelopmentatthescalethatitrequired,andthroughtheprovisionofstrategicandvisionaryleadership.TotheFP&MSETAExecutiveteam,seniormanagementandstaff,IwouldliketoexpressmyappreciationforyoureffortstotaketheFP&MSETAtothenextlevelthroughyourdedication,results-drivenandcustomer-centricapproach.

MsFellengYendeChiefExecutiveOfficerFP&M SETADate: 31 July 2015

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5. STATEMENT OF RESPONSIBILITY AND CONFIRMATION OF ACCURACY FOR THE ANNUAL REPORT

Tothebestofmyknowledgeandbelief,Iconfirmthefollowing:

AllinformationandamountsdisclosedintheAnnualReportareconsistentwiththeAnnualFinancialStatementsauditedbytheAuditor-General.

TheAnnualReportiscomplete,accurate,andisfreefromanyomissions.

TheAnnualReporthasbeenpreparedinaccordancewiththeguidelinesasissuedbyNationalTreasury.

TheAnnualFinancialStatements(PartE)havebeenpreparedinaccordancewiththeGRAPstandardsapplicabletothepublicentity.

TheAccountingAuthorityisresponsibleforthepreparationoftheAnnualFinancialStatementsandforthejudgementsmadeinthisinformation.

TheAccountingAuthority is responsible for establishing, and implementing a systemof internal control that has been designed to providereasonableassuranceastotheintegrityandreliabilityoftheperformanceinformation,thehumanresources(HR)information,andtheAnnualFinancialStatements.

TheexternalauditorsareengagedtoexpressanindependentopinionontheAnnualFinancialStatements.

Inouropinion,theAnnualReportfairlyreflectstheoperations,theperformanceinformation,theHRinformation,andthefinancialaffairsofthepublicentityforthefinancialyearended31March2015.

Yoursfaithfully

Chief Executive Officer MsFellengYendeDate: 31 July 2015

Chairman of the BoardMr Sipho NgidiDate: 31 July 2015

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7. LEGISLATIVE AND OTHER MANDATES

Legislation:

TheFP&MSETAisaPublicEntityunderSchedule3AofthePublicFinanceManagementAct(PFMA),1999(ActNo01of1999).

The FP&M SETA is governed by:

• TheConstitutionoftheRepublicofSouthAfrica,1996(ActNo.108of1996)• Section9oftheSkillsDevelopmentAct,1998(ActNo.97of1998)asamendedin2008• SkillsDevelopmentAmendmentAct,2008(ActNo.37of2008)• SkillsDevelopmentAmendmentAct,2011(ActNo.26of2011)• SkillsDevelopmentLeviesActof1999(ActNo.9of1999)asamendedin2010(Act24of2010)• TheNationalQualificationsFrameworkAct,2008(ActNo.67of2008)• TheSouthAfricanQualificationsAuthorityAct,1995(ActNo.58of1995)• ThePublicFinanceManagementAct,1999(ActNo.01of1999)asamended)• TreasuryRegulationsforDepartments,ConstitutionalInstitutionsandPublicEntities• SectorEducationandTrainingAuthorities(SETAs)GrantRegulationsRegardingMoniesReceivedbyaSETAandRelatedMatters(Regulation

No.990of3rdDecember2012)

6. STRATEGIC OVERVIEW

VISION

“Tobeacredibleandeffectiveskillsdevelopment

partner ensuring the delivery ofserviceexcellencethatwillproduceahighly-skilled

world-classworkforcethrough various skills

developmentinterventions.”

MISSION

“Toestablishacredibleinstitutionalmechanismthatfacilitatesanefficient

andeffectiveskillsdevelopmentprocess,througharangeofquality

servicesandpartnerships,tocontributetotheachievementofsector

competitiveness,transformationandeconomicgrowth.”

VALUES

FP&MSETAiscommittedtolivingitsvalueswhichinclude:

• Integrity-Honouringourmandateanddoingwhatisright• Accountability–Clarifyingandacceptingresponsibilityand

deliveringonourcommitments• Respect – Driving delivery with respect towards all our

stakeholders, embracing openness, trust, teamwork,diversity,andrelationshipsthataremutuallybeneficial

• Service excellence – Striving for the best service anddelivering it with pride

• Inclusive, sustainable socio-economic transformationalinterventions – Driving and supporting interventionsthat are meaningful and that will impact positively onthe realisation of economically independent individuals andcommunities.

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other mandates:

• NationalSkillsDevelopmentStrategyIII(NSDSIII)• MediumTermStrategicFrameworkofGovernment(MTSF2009-2014)• MediumTermExpenditureFrameworkofGovernment• NewGrowthPath• IndustrialPolicyActionPlanIIl(IPAP3)• HumanResourceDevelopmentStrategy• NationalDevelopmentPlan• NationalSkillsAccord• IntegratedGrowthandDevelopmentPlan• YouthDevelopmentStrategy• RuralGrowthandDevelopmentStrategy• ProvincialGrowthandDevelopmentStrategy

8. ORGANISATIONAL STRUCTURE (AS AT 31 MARCH 2015)

Accounting Authority /

FP&M SETA BoardChairman

Mr Sipho Ngidi

Chief Executive

OfficerMsFellengYende

Acting Chief

FinancialOfficer

Mr SithembisoNgwenya

Finance Supply Chain ManagementInformation Technology

Skills Planning & Reporting

Communications & Stakeholder Engagement

Human ResourcesResearch

QualificationsDevelopment

LearningProgrammes

Monitoringand Evaluation

Regions:Gauteng

Western CapeKwaZulu-Natal

Executive Manager Research

Planning & Reporting MrPKNaicker

Executive Manager Quality

AssuranceMr William Ntsoane

Executive Manager Projects

Mr Kennedy Matodzi

Executive Manager

Governance Compliance

Risk Legal (GCRL)MrSchalkBurger

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9. FP&M SETA OFFICES

KwaZulu-Natal Office

Western Cape Office

The FP&M SETA KZN Regional Office is situated at the 2nd and 3rd Floor, Umdoni Centre, 28 Crompton Street, Pinetown, 3600. Tel: 031 702 4482.

The FP&M SETA Western Cape Regional Office is situated at 3rd Floor, West Wing, Palms Centre, 145 Sir Lowry Road, Woodstock, Cape Town.Tel: 021 462 0057.

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Gauteng Office


The FP&M SETA Head Office and Gauteng Regional Office is situated at Forum 1B, 2nd Floor, Braampark Office Park, 33 Hoofd Street, Braamfontein, Johannesburg, 2001. Tel: 011 403 1700.

9. FP&M SETA OFFICES

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BpARt B: peRfoRMAnceinfoRMAtion

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1. AUDITOR’S REPORT: PREDETERMINED OBJECTIVES

TheAGSAperformedthenecessaryauditproceduresontheperformanceinformationtoprovidereasonableassuranceintheformofanauditconclusion.TheauditconclusionontheperformanceagainstpredeterminedobjectivesisincludedinthereporttomanagementwithmaterialfindingsbeingreportedunderthePredeterminedObjectivesheadinginthereportonotherlegalandregulatoryrequirementssectionoftheauditor’sreport.

Refertopage75to76oftheAuditorsReport,publishedasPartE:FinancialInformation.

2. SITUATIONAL ANALYSIS

2.1 Service Delivery Environment

TheFP&MSETAhasincreaseditsperformancemarkedlysinceestablishmentinMarch2011.TheFP&MSETA’sperformanceincreasedin2014/15to86,2%,fromthe80%reportedin2013/14,asaresultofmeeting44outofatotalof51programmeperformanceindicatorsandtargets.

ThisincreaseinperformanceandservicedeliverycanlargelybeattributedtotheimplementationofthenewbusinessmodelandorganogramthatwasconceptualisedanddevelopedbytheCEO,MsFellengYende,inconsultationwiththeFP&MSETABoard.Thebusinessmodelcalledforahighperformancecultureandacustomer-centricapproachtotheFP&Msector.Thesector’scommunitiesalignedtotheWhitePaperforPostSchoolEducationandTrainingtoensuretheeffectiveandefficientdeliveryofintegratedPostSchoolTraining.

AsignificantcontributiontotheservicedeliveryenvironmentwastheimplementationoftheFP&MSETAResearchStrategyandResearchAgenda.TheResearchChair Initiativewas concluded in partnershipwith theUniversity ofWitwatersrand (WITS REAL) to increase the FP&MSETA’sresearchcapacityandtofacilitatethedevelopmentofarelevantandwell-researchedSectorSkillsPlan.ThisinitiativeaddressedtheFP&MSETA’sexpandingresearchagendaandassistedtheSETAinremainingrelevantandprogressive.

TheResearchChairisspecificallydesignedtosupportresearchontheFP&Msectorandits13sub-sectorsinthecontextoftheSouthAfricaneconomy.Benchmarkingbestpracticesintheareaofskillinginthesectorandsub-sectorsglobally,aswellasundertakingimpactassessmentsofeducationandtraininginitiativesundertakenbytheFP&MSETA,arealsocritical.Fivescholarshipsforthetrainingofpost-graduatePhDstudentsinthepoliticaleconomyofskills,arealsoprovidedbytheResearchChair.

ATrackingandTracingStudywascommissionedbytheFP&MSETAontheimpactandsocialreturnoninvestmentoflearnerships,apprenticeshipsandbursariesfundedbytheSETAfrom2011to2014.Theresultsindicatedthattheselearninginterventionshaveaconstructiveandencouragingimpactonthe livesof learnersandalsocontributepositivelytoemployers.Eventhoughchallengesstillexist inthe implementationoftheseprogrammes,itisgenerallyagreedthattheinitiativeshaveabeneficialeffectonthesuccessofindividualbusinessesandthecompetitivenessandsustainabilityofthesectorasawhole.

TheFP&MSETAstakeholderperceptionsurvey,whichwasconducted intheperiodunderreview, confirmedthatgenerallytheFP&MSETA was positively viewed, and was seen as an organisation that addresses the skills development priorities and mandate of the sector itrepresents.AsaresultstakeholdersarewillingtoworkinpartnershipwiththeSETAtoensuretheeffectiveimplementationofmeaningfulskills developmentinterventions.

Inordertopromotecredibleskillsplanningpractices,theFP&MSETAmanagementengagedwithindustrystakeholdersinworkshops,interviewsand focus group discussions, and produced an accurate and credible Sector Skills Plan that accurately reflects the scarce and critical skillsof thevarious sub-sectors. Servicedeliverywasalsoenhancedby theempowermentof stakeholders toaddress their scarce skillsneedsbyenrichingoccupationally-directedqualificationsthatarenationallyrecognisedandregisteredwiththeQualityCouncilforTrade&Occupations.BenchmarkingwasalsoundertakentoensurethatthenewqualificationsmeetinternationalstandardsandrequirementswhilstsimultaneouslyincreasingtheglobalcompetitivenessoftheFP&Msector.

StrategicplanningsessionsbetweentheFP&MSETABoard&Managementutilisingresearchresults,enhancedtheunderstandingoftheskillsneedswithinindustrialsub-sectorsaswellasimprovedskillsdevelopmentimplementationandoperationalstrategies.ThisledtoanimprovedandupdatedSectorSkillsPlan,StrategicPlanaswellasAnnualPerformancePlanbeingsubmittedtoDHETwithintherequiredtimeframes.

TheWhitePaperonPostSchoolEducationandTraining,whichhighlightstheimportanceofpartnershipsbetweenSETAs,educationalinstitutionsandtheprivatesector,hasreceivedenormousattention.ManystrategicandcarefullyselectedpartnershipshaveenabledtheFP&MSETAtohaveapositiveimpactintheareasofruraldevelopment,disability,povertyalleviation,gendertransformationandyouthdevelopment.

ThesuccessfulpartnershipsbetweenTVET/HETinstitutions,theSETA,localbusinessesandindustrieshaveproducedsignificantskillsdevelopment,workintegratedlearningplacementandemploymentopportunitiesforunemployedgraduatesinthesector.Thisinturnhasincreasedtheskillspoolformiddleandhighlevelskillstoaddressthescarceandcriticalskillspriorities.

pARt B: peRfoRMAnce infoRMAtion

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VarioushighimpactprojectsimplementedandconceptualisedintheFP&Msector,duringtheperiodunderreview,include:

Prioritising Qualifications Development

The FP&M SETA Board has committed approximately R58,8 milliontowardsthedevelopmentof54occupationally-directedqualificationsaligned to QCTO requirements for 10 industrial sub-sectors viz.clothing,textiles,footwear,leather,forestry,pulpandpaper,printing,publishing,packaging,furnitureandwoodproducts.IndustrypartnerswereidentifiedtodrivetherestructuringofexistingSAQAqualificationstothenewQCTOformat.

Projectco-ordinators forthevarioussub-sectorsreporttothenewlyestablished Qualifications Management Forum to ensure that thisintervention iswellmanagedandco-ordinated.Steadyprogresswasreported during the period under review and approximately eight qualificationsweresubmittedtoQCTOforregistration.Alignedtothequalificationsdevelopmentprocess,anexpenditureofR16.2millionofthecommittedfundswasincurred.Thevariousqualificationsthatwerefundedinclude-Upholsterer,SewingMachineOperator,HomeTextilesMachine Operator, Footwear Bottom Stock Production MachineOperator, Sheetfed Offset Lithographic Technician and SilvicultureMobile Plant operator.

Supporting local fashion design initiatives

TheFP&MSETApartneredwith theSouthAfricanFashionDesignersAgency(SAFDA)tohostthe20thVukaniFashionAwardsinBraamfonteininOctober2014.Theweek-longeventwassponsoredbytheSETAtothe tune of R3million. The objective of the projectwas to providetrainingtoyoungupandcomingdesignersandentrepreneurs,andtoenlightenthemofthecareeropportunitiesinthefashionindustry.TheVukaniFashionAwardscomprisedseveraldifferentcomponents:

• an Enterprise Exhibitionwhere up and coming entrepreneursshowcasedtheirproducts

• InformationSeminars&WorkshopswhichwereattendedbyyouthfromnearbyTVETcolleges,privatetraininginstitutions,learners from Sew Africa, students from local higher educationinstitutions, young fashion entrepreneurs, nominees of theVukani Awards & students of SAFDA

• AfricanPrideAwards• YoungFashionDesignerAwards

Masebe Motsepe (middle) was the winner of the “Best Ready-to-Wear Collection” and was awarded the honour of “Overall Winner”

The Honourable Minister of Higher Education and Training, Dr Blade Nzimande, launched the Richmond-Indaleni Community Skills Centre. He is seen here with the CEO of the FP&M SETA, Ms Felleng Yende, the Chairman of the FP&M SETA Board, Mr Sipho Ngidi and dignitaries from other stakeholder groupings.

Forestry stakeholders during a qualifications development workshop

Community Skills Centre in Richmond

InexcessofR25millionwasallocatedbytheFP&MSETABoard,totheestablishment of the “Richmond-Indaleni’ Community Skills Centre.Thecentrewillofferpost-schooleducationandtraininginterventionsthatwillenableyoungpeopletodevelopoccupationallydirectedskills.These skills will contribute to the socio economic upliftment of thebroaderRichmondcommunitybytacklingthetwinevilsofpovertyandunemployment that plague the area.

TheSkillsCentrewillbeaccreditedbytheFP&MSETAQualityAssuranceDivision to implement the following FP&M SETA programmes - garment Construction; Furniture Making / Cabinet Making; Silviculture; PestControl;TreeFelling&TimberProduction;andFootwearHandLacing.This initiative is a partnership project between the FP&MSETA, theDepartmentofHigherEducationandTraining,UmgungundlovuTVETCollege, the strategic delivery partner responsible for the projectmanagement and the building of the Community Skills Centre, the communityofRichmondandtheMethodistChurch.

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Mathapelo Makomene

The CEO of Regenesys, Ms Siegie Brownlee and the CEO of the FP&M SETA, Ms Felleng Yende recently launched the ILDP programme. They are seen here with the ILDP candidates and members of the FP&M SETA staff.

Learners from Clothing SMMEs attending a Team Leader Programme at the FET College South Africa (KZN).

SAGDA Partnership with FP&M SETA

The FP&M SETA has partnered with the South African GraduateDevelopmentAssociation(SAGDA)toplaceinternswithinFP&MSETAregionalofficesandotherFP&MSETAworkplacessothattheseyoungindividualscanworkcloselywiththeirmentorsandgainprofessionalexperience. The partnership between SETA and SAGDA offeredopportunityto350learnersinthe2013/2014financialyearofwhichmostcompletedtheprogrammeandwereabletoprocurepermanentpositions. The partnership has offered further opportunity to 210learners during the 2014/2015 year under review.

MathapeloMakomeneisoneofthe internsthatholdsaBachelorofTechnologydegreeinLogisticsManagementandiscurrentlyenrolledfor anM-Tech degree at the University of Johannesburg. “I joinedtheFP&MSETA inApril2014asa supply chainmanagement intern.It has been a flourishing andwell-travelled journey. I regardmyselfasveryfortunatetobeamongstthegenerationthatcompletedtheirstudiesinrecordtimeandreceivedaninternshipstraightafter.Realityisthattherearethousandsofqualifiedgraduatesthatarehomewith theirdegrees.”

Clothing SMME Development Projects in Kwazulu-Natal and Western Cape

The Apparel Manufacturers of South Africa Cluster Training SMMEProject takes place in KwaZulu-Natal and the Western Cape. TheobjectiveoftheprojectistoimproveanddeveloptheSMMEs’currentcapability,thusensuringlongtermsustainability.InKwaZulu-Natal40SMMEs,whicharesmallcompanieslocatedmainlyintheruralareasincludingLadysmith,IsithebeandPortShepstonearebeingdeveloped,andintheWesternCape,50companiesintheCapeMetroandruralareassuchasAtlantis,CaledonandHermanusarealsoinvolved.

The project is valued at approximately R12,3 million with trainingfocused on three key areas including, world class manufacturing,technical skills development and management development. Todate, 1,079 employed and unemployed learners have been registered on management development programmes, clothing learnershipsand skillsprogrammes,whichautomaticallybroadens the skillsbaseof workers in the clothing industry and provides opportunities tounemployed youth to enter the labour market with employable skills.

International Leadership Development Programme

The FP&M SETA International Leadership Development Programme(ILDP) is a high level skills course pitched at NQF level 7/8. Itis specifically intended to provide opportunities to previouslydisadvantaged individualstoacquirebusiness leadershipskillsacrosstheFP&Msectorandtoaddresstransformation.

It is anticipated that this programme will provide the sector withpotentialleadersthathaveagraspofthetechnicalsideofthebusiness,aswellastheactualbusinessside.Thestudentsneednotonlycomefromthemanufacturingarena,theycouldbeOperations,PlanningorMarketing Managers who exhibit the required attributes and meetothercriteria.Belowareafewexamplesofthefieldsthatcandidatesmaycomefrom,yetthisisbynomeansanexhaustivelist:

• Leather and footwear technologists, fashion designers /technologists/cut-make&trim(CMT)

• Publishers, journalists, foresters, furniture designers, printers,packagingdesigners

A budget of R8,1 million has been set aside for this programme during the reporting period, for implementation in the new financial year.TheILDPisexpectedtoprovidecutting-edgeknowledge,bestpracticeandtrendsinleadership,innovationandentrepreneurship,byvisitinginfluentialinstitutionsandengagingestablishedleadersintheUSAandSouthAfrica.

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2.2 Organisational environment

Toaddress,amongothers,theinheritedchallengesgenerallyexperiencedbyamalgamatedorganisations,afocusedthreeyearturn-aroundplanwaspreparedandanorganisationalreviewwasconductedtoidentifythepressurepointsintheorganisation.Thisgaverisetothedevelopmentofaninnovativebusinessmodel,withaproposedneworganisationalstructure,andcleardeliverymechanisms,thatwouldenabletheorganisationtodeliverontimeandtotheagreedstandardonitscommitments,assetoutintheAnnualPerformancePlan.

Duringtheperiodunderreview,theFP&MSETAmadesignificantchangestoitsorganisationalstructureinordertoaddresstheimplementationofthenewbusinessmodeltoensurecost-effectiveandefficientservicedeliverytothesector.Thenewbusinessmodel isalreadydeliveringoutstandingresultsandtheSETA’sperformancehasincreasedbymorethan8%fromthepreviousyear.

Generally staff carried out their duties diligently and enthusiastically, and in line with their agreed new job descriptions and performanceagreements.Changesthatoccurredduringtheyearduetotheconsequencesoftheimplementationofaneworganogram,weremanagedinlinewithapprovedHRpoliciesandprocedures.Performancemanagementandthecontinuousprofessionaldevelopmentofstaff,contributedmarkedlytotheorganisationmeetingitsstrategicobjectives.

The yearunder reviewalso saw the implementationof anew integratedmanagement information system (MIS) aligned to theoperationalbusinessprocessesoftheSETA.ThepurposewastostreamlinetheoperationalactivitiesoftheSETAandensuremoreaccuratereportingandefficientrecordmanagement.Thesystemincludesweb-basedmandatoryanddiscretionarygrantapplicationfacilities,aswellasmanagementmoduleswhichenhanceservicedeliveryintheskillsplanningandprojectsdivisions.Inaddition,theFP&MSETAmanagement,implementedactionplanstoresolvethepreviousyear’sauditfindings,withtheprocesscloselymonitoredbytheExecutiveCommittee.

The FP&MSETAhas efficient governance structures inplace to ensure good corporate governance, the implementationof relevantpoliciesandprocedures,andsoundfinancialmanagement.TheFP&MSETABoardprovidesstrategicdirectiontotheFP&MSETAandanIndependentAuditCommitteeplaysanoversightroletoensurethattheimplementationoffinancialpoliciesandprocedures,areinlinewiththePFMAandotherlegislativerequirements.AnExecutiveCommitteeisresponsibleforthemonitoringandevaluationofoperationalactivitiesincludingtheimplementationofactionplans.

2.3 Key policy developments and legislative changes

White Paper on Post-School Education and Training

TheWhitePaperwasapprovedbyCabineton20November2013andaddressesnewdevelopmentsand improvements intheSouthAfrican post-schooleducationsystem.

The White Paper:

• representsGovernment’sperspectiveonhighereducationandtraining,andiscloselylinkedtomajornationalpolicydocumentssuchastheNationalDevelopmentPlan.

• contains the blueprint to improve the entire post-schooling education environment through a consolidated system that consists ofarangeofeducational institutionsand institutional typesthatwillgrowandaccommodatethemillionsofpeople inSouthAfricathat requireeducation.

Thenewimprovedpostschooleducationsystemwillrecognisetherighttonotonlyaccessaneducationalinstitution,butalsotoprovidequalityeducation.Theproposedsystemshouldprovidepathsforarticulationbetweenvariousqualificationsandshouldfacilitatecontinuousprogression.The system should also meet the needs of learners of all ages and levels.

Theenvisagedpost-schooleducationandtrainingsystemshouldthereforebegearedtoprovideeducationandtrainingtothefollowinggroups:thosewhohavecompletedschool,thosewhodidnotcompletetheirschooling,andthosewhoneverattendedschool.

Institutions to formpart of the post school education and training system include PublicUniversities, Public TVETColleges (formerly calledFET Colleges), Public Adult Learning Centres, Private Post-School institutions – registered Private FET Colleges and PrivateHigher EducationInstitutions(TVETColleges),SETAsandtheNationalSkillsFund,aswellasregulatorybodiesresponsibleforqualificationsandqualityassuranceinthepost-schoolsystem–theSouthAfricanQualificationsAuthority(SAQA)andtheQualityCouncils.

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ThemainpolicyobjectivesoftheWhitePaperare:

• apost-schoolsystemthatcanassistinbuildingafair,equitable,non-racial,non-sexistanddemocraticSouthAfrica• expandedaccess,improvedqualityandincreaseddiversityofprovision• astrongerandmorecooperativerelationshipbetweeneducationandtraininginstitutionsandtheworkplace.

Expenditure capping for 2014/15

IntermsofaDHETcommunication,thebudgetallocationforthe2014MediumTermExpenditureFrameworkrepresentstheestimated levycollectionsperSETAandmustberecordedasestimatedrevenue.ExpenditurebudgetshadtobebasedontheexpenditurecappingthatwascommunicatedtoSETAs.SETAshadto,withinreasonablemeansoftheirexpenditureceilingandthroughutilisationofexistingreserves,contributetowardstheachievementofthefollowingkeygovernmentprioritiespertainingtothepost-schooleducationandtrainingsystem:

• OperationalisationofnewTVETcollegecampuses• Studentfundingfortechnicalandvocationaleducation• BursarysupportthroughNationalStudentFinancialAidScheme• ImplementationoftheNationalSeniorCertificateforAdults• TurnaroundinterventionsfortheWalterSisuluUniversity

TheaboveframeworkhadtobetakenintoaccountwhenfinalisingtheServiceLevelAgreement,StrategicPlanandAnnualPerformancePlan for 2014/15.

Treasury Instruction 01 of 2013/14

TreasuryInstruction01of2013/14,pertainingtoSchedule2and3PublicEntitiescirculatedon19December2013,prescribescostcontainmentmeasuresforaccountingofficersofdepartmentsandconstitutionalinstitutionsandaccountingauthoritiesofpublicentitieslistedinSchedule2and 3 PFMA.

Thefollowingnewpoliciesandregulationshadimplicationsfortheimplementationofoccupationally-directedqualifications,morespecificallyapprenticeships,intheFP&Msectorwitheffectfrom01April2014:

• DHET Trade Test Regulations, 2013 TheintentoftheregulationspublishedbytheDHETistoimplementasinglenationalartisantradetestingandcertificationsystemacrossall

economicsectors.Theregulationsarealsodesignedtoimproveaccessandtostandardisethequalityoftradetesting.Thiswillprovidetheindustrywithsuitablyqualifiedartisans.Thispolicyaddressesapplicationstoundergoatradetest,pre-tradetestevaluations,tradetestingfees, exemptions, credit accumulation, trade testingmonitoring, reporting and certification, complaints and appeals, and transitionalarrangements.

• National Standardised Artisan Learner Workplace and/or Site Approval Criteria and Guideline TheNationalArtisanModerationBody(NAMB)hasreleasedtheNationalStandardisedArtisanLearnerWorkplaceand/orSiteApproval

CriteriaandGuideline(Version3)forinterimimplementationonaprovisionalbasis,witheffectfrom21October2013.Thepurposeofthispolicyistoestablishasetofsingle,nationalstandardisedcriteriaandguidelinesforalllistedtradestoallowfortheapprovalofworkplacesand/orsitestodeliverthestructuredworkexperiencecomponentofrelevantartisantrades.

• Apprenticeship Contracts AninstructionreceivedfromtheDirector-GeneralofHigherEducationandTrainingdeterminedthat,witheffectfrom01April2014,all

apprenticesshouldsolelybecontractedundertheSkillsDevelopmentActutilisingtheLearnershipAgreement,includedasAnnexureBoftheLearnershipRegulations,aspublishedinGovernmentGazette30010dated28June2007.

2.4. Strategic Outcome-Oriented Goals

ListedbelowarethestrategicoutcomeorientedgoalsoftheFP&MSETAwhicharealignedtotheNSDSIII.

4.1 Establishing a credible institutional mechanism for skills planning

TheFP&MSETAhasestablishedsufficientresearchandskillsplanningcapacityforthisstrategicobjectiveinordertoensurethatprojectionsforthedemandandsupplyofskillsarecoordinatedandintegrated.

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4.2 Increasing access to occupationally-directed programmes

TheFP&MSETAidentifiedthemiddlelevelskillsneedsofits13sub-sectors,andaddressedthemthroughpartnershipswithpublicTVETcollegesandUniversitiesofTechnology.Workingwithemployers,theFP&MSETAisfacilitatingtheplacementoflearnerstobenefitfromworkplace-basedtraining.Relevantandappropriateoccupational-directedqualificationsandcurriculumalignedtoindustryneeds,areregisteredwithQCTOandNAMB.Discretionary grantshavebeenallocated in supportof the implementationof learningprogrammes toaddress the identified scarceandcriticalskillsofthesub-sectors.Approximately54newoccupationalqualificationsarecurrentlyunderdevelopment, inconsultationwith sub-sectoralCEPsforregistrationwiththeQCTOinthenearfuture.

4.3 Promoting the growth of a public TVET college system that is responsive to sector, local, regional and national skills’ needs and priorities

MemorandaofUnderstanding(MOUs)havebeenconcludedwithpublicTVETcollegestodeliveroccupationalprogrammesthatmeetindustryneeds, includingthosesupportingapprenticeshipsandN-course.TheFP&MSETAhaspartneredwithTVETcollegestopromoteWILandtheplacementofunemployedTVETgraduatesingovernmententities,municipalities,andFP&Mworkplaces.

4.4 Addressing the low level of youth and adult language and numeracy skills to enable additional training

Discretionarygrantshavebeenmadeavailabletoprovideunemployedyouthwithfoundationallearningqualificationsandbasicoccupationalskills,inordertoprovidethemwiththenecessaryskillstoaccesstheoccupationallydirectedqualificationsoftheFP&Msector.

4.5 Encouraging better use of workplace-based skills development

Inordertopromoteskillsdevelopmentintheworkplace,theFP&MSETAhasaddressedthetrainingofemployedworkersalignedtoscarceandcriticalskillsneeds,asidentifiedintheFP&MSSP.Thisensuresimprovedproductivityandeconomicgrowth,andpromotescareerpathingfortheworkforce.TheFP&MSETAhassuccessfullydisbursedmandatorygrantstoincreaseemployerparticipationinskillsdevelopmentatfirmlevel.IthasalsoencouragedtheimplementationofPIVOTALprogrammes,alignedtotheSETAgrantregulations,publishedinDecember2012.

4.6 Encouraging and supporting cooperatives, small enterprises, worker-initiated, NGO, and community training initiatives

Community-basedorganisationsaresupportedthroughthediscretionarygrantstrategyoftheFP&MSETAinordertoexpandandcontributetosectoreconomicandemploymentgrowth.Thisisdonethroughinterventionsthataddressthekeyareasofcriticalskills’demandsthatimpactsontheefficacyandsustainabilityoftheseventures.

4.8 Building career and vocational guidance

CareerandvocationalguidancearecrucialtoschoolleaversandunemployedyouthwishingtogainaccesstotheFP&Msector.TheFP&MSETAhasnetworkedwithpotentialjobseekersduringvariousinteractivecareerexhibitionsandhassharedinformationonavailablelearningandcareeropportunitiesintheFP&Msector.

Thedevelopmentofanintegratedweb-basedcareerportal,andtheestablishmentofaGauteng-basedcareercentre,havebeenapprovedforimplementationbytheFP&MSETABoard.

Theabovestrategicoutcomeorientedgoalsinformedthepredeterminedobjectives,assetoutintheAnnualPerformancePlanoftheFP&MSETAfor2014/15.Theperformanceagainstthesegoalsisreportedindetailintheperformancereport,onpredeterminedobjectivesincludedonpage28 to page 53.

3. PERFORMANCE INFORMATION BY PROGRAMME/ ACTIVITY/ OBJECTIVE

3.1 Programme 1: Establishing a credible institutional mechanism for skills planning

Theprogrammeintendstoestablishacredibleinstitutionalmechanismforskillsplanningandpartnerships,withkeydeliverypartnersamongsttheprovidercommunity,employers,labourunions,andinterestedorganisedlearnercommunities.ThiswillholisticallyenhanceskillsplanningintheFP&Msector.Therationaleisthatanyhumanresource/skillsplanningshouldbecomplementedwithbetterdataandimprovedlabourmarketanalysis.TheFP&MSETAhastoestablishitsownmechanismthatisaligned,andfullycompliant,withthereportingrequirementsoftheDHETtoenhanceskillsplanninginthesector.ItisimportantfortheFP&MSETAtodevelopitsresearchcapacityinordertomakeaccuratelabourmarketprojectionstoinformtheFP&MSETASectorSkillsPlan.Thiswouldensuretheco-ordinationofinformationsourcesthatencompassthedemandand supply of skills.


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Strategic objectives, performance indicators, planned targets, and actual achievements

Strategic Objective: 4.1. Establishing a credible institutional mechanism for skills planning

Performance Indicator

Actual achievement 2013/14

Planned target 2014/15


Deviation from planned target to actual achievement for 2014/15

Comment on deviations

4.1.1Acrediblemechanismforskills planning andresearchpartnerships, with key delivery partners, are established to enhancelabourmarket analysis and skills planning thatisresearched,documentedandcommunicatedtoenableeffectiveplanningacross allsectors.

A skills matrix to identifyscarce andcriticalskills was implemented. This was used toidentifyskillschallengeswithin anorganisation.

Theobjectiveoftheskills matrix was for industrytocorrelatethedifferentfindingssothattheoutcomefromtheassessments would contributetothevalue-add of the SSP update.

(a) - Updated SSP, StrategicPlan,andAnnualPerformancePlanincorporatingfindingsonbothhorizontal and verticalskills.

-Qualificationsreview with CEPs in line with the skillsauditfindingsundertaken with sub-sectorsateachqualificationsscopingsession.

-Researchreporttoestablishprojectstodrivecrosssectoralvaluechainlinkages.

(a) - Updated SSP, StrategicPlan,AnnualPerformancePlanincorporatingfindingsonbothhorizontal and verticalskillssubmittedtoDHET.

-8OccupationalQualificationsreviewed with sub-sectorCEPsalignedtoQCTOrequirements.

-ApprovedResearchAgenda to address crosssectoralvaluechainlinkagessubmittedtoDHET.

Targetachieved–nodeviation.

4.1.2. A skills matrixcoveringboth horizontal andverticalskillsis developed for a minimum of 5 sub-sectorsintheFP&M SETA and is benchmarkedlocallyandinternationally.

i. Assessment instrument (matrix) implemented during focusgroupsessionsheld with industry stakeholders from 19 - 21 August 2013.

ii. Updated FP&M SETASectorSkills Plan that incorporatesoutputsfromfocusedgroupworkshopssubmittedto DHET within the requiredtimeframes.

a) A skills matrix instrument is developed and implemented to identifyscarceandcriticalskillsgapswithin5sub-sectorsto update labour market needs within thesesub-sectors.

(b)10%oftheemployees in the FP&Msectorareevaluated and the credibilityoftheinstrumentverified.

(c)Implementdiscretionarygrantprojectstoaddressthe skills gaps revealed in the assessment report by October2014.

a) Skills matrix instrument developed by SDFs during SDF training funded by the FP&M SETA.

b) Approximately 207,000(64%)employees out of an estimated321,000employees were coveredduringtraining needs analysesconductedby 1,226 levy paying entitiesduringthesubmission of WSP/ATRs.

c)Discretionarygrants were approved by the FP&M SETA Board in July 2014 for implementationoflearning programmes addressingscarceandcriticalskillsgapsintheFP&Msector.

Targetexceeded. Specialprojectfortraining of ETD practitionersinthesectorwasimplemented to buildthecapacityofskills development facilitatorsinthesectorduringtheperiod under review whichcontributedto the target being exceeded.

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4.1.3. An assessment instrument is developed & implemented to evaluate employees against the matrix to identifyskillsgapsin5sub-sectors.

Notapplicable. An assessment instrument is developed to ensure electronicandguidedevaluationbySDFsforconductinga training needs analysis within FP&M SETAorganisations.

Assessment instrument developed during SDF training.


4.1.4. To develop acomprehensiveeducationandoccupationalprofileof employees in a minimum of 5 sub- sectorsbySeptemberofeachyear.

Notapplicable. Aprofileofemployees per occupationalcategorythatisapplicableacross5sub-sectorsiscompiledalignedto labour market analysiscompletedby September 2014.

One(1)researchreportconfirmingprofileofemployeesintheFP&Msectorcompiled.


3.2 Programme 2: Increasing access to occupationally directed programmes

Theaimof thisprogramme is toestablishprojectsandpartnerships toenabletherelevantnumberofartisanstobetrained, toqualify,andbecomeworkready.ManySouthAfricanlearnersarepoorlypreparedtoundertakefurtherlearningwhentheyleaveschool.Manycannotaccesspost-schooleducationandtrainingopportunities.Alargenumberofyouthandadultsarenotinemployment,education,ortraining(NEET).

Theobjectiveofthisprogrammeistoprovideopportunity(andfunding)toadultsandyouthtoaccesseducationandtrainingoptions.

Thiswillincludeaccesstofoundationallearningprogrammesaswellasadulteducationandtrainingprogrammes(AET). Strategic objectives, performance indicators, planned targets, and actual achievements

Strategic Objective: 4.2 Increasing access to occupationally directed programmes







4.2.1. Establish occupationallevelsin a minimum 5 sub- sectorscompletewiththeirrespectiveproficiency/development standards.

FP&MSETAartisantradesarenationallyrecognisedbyNAMB/alloccupationally-directedqualificationsthatfallwithin the primary scopeoftheFP&MSETA have been registered in 2012 withSAQAandtheQCTOforaperiodof three years with a further two year teach-outperiod.

1. The following programmes, whichmeetQCTOrequirements and supportkeyactionprogrammes of industrial strategies, are registered for the FP&Msector:

(a) An intermediary programmetocaterfor employees with less than a grade 12 qualification.

(a) one (1) AET occupationalprogramme registered with SAQA.

(b) Learnership qualificationsareactiveandregisteredwithQCTO.

(c)ApprenticeshipqualificationsareactiveandregisteredwithQCTOandNAMB.


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4.2.1. Establish occupationallevelsin a minimum 5 sub- sectorscompletewiththeirrespectiveproficiency/development standards.

ii. The development ofoccupationally-directedqualificationswithminimumproficiencystandards have been undertaken in six sub-sectors(printing,clothing,textiles,footwear, leather, and general goods).

iii. FP&M SETA submittedDevelopmentQualityPartner(DQP)applicationsfornewoccupationalqualificationsdevelopment for six sub-sectors(clothing,printing,textiles,leather, furniture, and forestry).

iv. Developed a Career Pathing Model aligned to anoccupationalqualificationsframework for the Forestrysub-sectortoaddressverticaland horizontal progression of workers.

v. The FP&M SETA openeddiscretionarygrantfixedfunding windows in July/August 2013 to address occupationally-directedtraininginterventionsto promote occupationaldevelopment both horizontally and vertically.

(b) A standard programme formatricandequivalent learnership.

(c)Anartisanallevelprogramme.

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4.2.2.ConductcomprehensiverecognitionofPriorLearning (RPL) of employees with no minimumeducationentryqualificationsin a minimum of 3sub-sectors.

oTHER DISCRETIONARYPRoJECT TARgETS (INCLUDINGAPPRENTICESHIPS)

RPL Skills Programmes entered.

80 employed learners entered on skills programmes and assessed through RPL methodology.

RPL:210 employed learners entered on RPL programmes and assessed utilisingelectronicassessments.

RPL:229 employed learners registered via RPL route on skills programmes.

Funded learners - 229

19 Positivevariance:109%ofachievementrecorded.

DedicatedRPLspecialprojectswereimplemented in the sectorduringtheperiod under review.

RPL Skills Programmes completed.

Notapplicable. 105 learners certifiedthroughRPLmethodology.

NIL learners certificatedthroughRPL methodology.

-105 Negativevariance:NILachievementsrecorded.

Althoughdedicatedprojectswereimplemented, the sectorexperiencedchallengesinoperationalimplementationofRPL. Poor monitoring andevaluationalsocontributedtothenegativevariance.

4.2.4. Develop a leadofoccupationallearning programmes in a minimum of 3sub-sectorsandmatchemployeesaccordingly.

TARgETS FoR OCCUPATIONALLY-DIRECTED PRogRAMMES –PIVOTALPRogRAMMES ESTABLISHED AND ALIgNED To BUDgET

AdultEducationand Training (AET) programmes entered.

200 learners entered AET programmes.

AET: 200 learners entered AET programmes.

AET: 200 learners entered AET programmes.



AdultEducationand Training (AET) programmes completed.

100 learners completedAETprogrammes.





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ArtisanLevelProgramme entered by employed learners.

55 employed learners entered Apprenticeshipprogrammes.

APPRENTICESHIPS - Section 13: 150 employed learners entered Apprenticeshipprogrammes.

APPRENTICESHIPS - Section 13: 85 employed learners entered Apprenticeshipprogrammes.


-65 Negativevariance:57%oftargetachieved.Lackof uptake of apprenticeshipgrantsbyrecommendedbeneficiariesresultedinanegativevariance.Advocacyandmarketingiscriticalforuptakeoftheapprenticeshipprogramme.

ArtisanLevelProgramme completedbyemployed learners.

99 employed apprenticesApprenticeshipprogrammes completed.

75 employed apprenticescertificatedoncompletionofapprenticeshipprogrammes.

24 employed apprenticescertificatedoncompletionofapprenticeshipprogrammes.


-51 Negativevariance:32%oftargetachieved.Slowcompletionrates of learners registered on the apprenticeshipprogrammesince2011.Increasedcompletionratetobeachievedthroughfocusedmonitoringof the programme in the new financialyear.

ArtisanLevelProgramme entered by unemployed learners.

201 unemployed learners entered Apprenticeshipprogrammes.





ArtisanLevelProgramme completedbyunemployed learners.

150 unemployed learnerscompletedApprenticeshipprogrammes.

108 unemployed learnerscertificatedoncompletionofApprenticeshipprogrammes.

NIL unemployed learnerscertificatedoncompletionofApprenticeshipprogrammes.

-108 Negativevariance:NILachievementrecorded.Slowcompletionrates of learners registered on the apprenticeshipprogrammesince2011.Increasedcompletionratetobeachievedthroughfocusedmonitoringof the programme in the new financialyear.

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Learnership entered by employed learners.

751 employed learners entered learnership programmes.

Funded learners = 703

Unfunded learners = 48

LEARNERSHIPS:700 employed learners entered learnership programmes.

LEARNERSHIPS:869 employed learners entered learnership programmes.


Unfunded learners - 60

169 Positivevariance:124%achievementrecorded.Learnership entries from previous financialyearenhancedthisachievement.Validated by DHET.

Learnership completedbyemployed learners.

581 employed learners on learnership programmes certificatedoncompletionofprogrammes.




2 Positivevariance:101%achievementrecorded.Learnership completionsfrompreviousfinancialyearenhancedthisachievement.Validated by DHET.

Learnership entered by unemployed learners.

2,200 unemployed learners entered learnership programmes.



Funded learners - 2,409

Unfunded learners - 110

1,479 Positivevariance:242%achievementrecorded.Learnership entries from previous financialyearenhancedthisachievement.Validated by DHET.

Learnership completedbyunemployed learners.

1,008 unemployed learners on learnership programmes certificatedoncompletionofprogrammes.

520 unemployed learners on learnership programmes certificatedoncompletionofprogrammes.

791 unemployed learners on learnership programmes certificatedoncompletionofprogrammes.


271 Positivevariance:152%achievementrecorded.Learnership completionsfrompreviousfinancialyearenhancedthisachievement.Validated by DHET.

Skills programmes (Management / technicalskills/entrepreneurship / life skills) entered by employed learners.

2,178 employed learners entered skills programmes.

Funded learners = 2,015Unfunded learners = 163

SKILLS PROGRAMMES: (Management / Technical Skills / Entrepreneurship / Life Skills):1,000 employed learners entered skills programmes.

SKILLS PROGRAMMES: (Management / Technical Skills /Entrepreneurship / Life Skills):3,264 employed learners entered skills programmes.

Funded learners = 2,914Unfunded learners = 350

2,264 Positivevariance:326%achievementrecorded.Theachievementagainstthisperformanceindicatorwascomplementedbyskills programmes entries in the previousfinancialyear. Validated by DHET.


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Skills programmes: (Management / technicalskills/entrepreneurship / lifeskills)completedby employed learners.

1,299 employed learners on skills programmes certificated.

Funded learners - 1,136Unfunded learners - 163

500 employed learners on skills programmes certificated.

768 employed learnerscertificatedoncompletionofskills programmes.

Funded learners - 658Unfunded learners - 110

268 Positivevariance:154%achievementrecorded.Theachievementagainstthisperformanceindicatorwascomplementedbyskills programmes completionsinthepreviousfinancialyear. Validated by DHET.

Skills programmes: (Management / technicalskills/entrepreneurship / life skills) entered by unemployed learners.

807 unemployed learners entered skills programmes.


550 unemployed learners entered skills programmes.

1,471 unemployed learners entered skills programmes

Funded Learners - 1,320Unfunded learners - 151

921 Positivevariance:267%achievementrecorded.Theachievementagainstthisperformanceindicatorwascomplementedbyskills programmes entries in the previousfinancialyear. Validated by DHET.

Theincreasedperformanceinthistargetisattributedtotheimplementationofspecialprojectsrelatingtoskillsprogrammes to addresssectoralpriorities,ruraldevelopment and disability.

Skills programmes: (Management / technicalskills/entrepreneurship / lifeskills)completedby unemployed learners.

699 unemployed learnerscertificatedoncompletionofskills programmes.

225 unemployed learnerscertificatedoncompletionofskills programmes.

1,065 unemployed learnerscertificatedoncompletionofskills programmes.


840 Positivevariance:473%achievementrecorded.Theachievementagainstthisperformanceindicatorwascomplementedbyskills programmes completionsinthepreviousfinancialyear. Validated by DHET.

Theincreasedperformanceinthistargetisattributedtotheimplementationofspecialprojectsrelatingtoskillsprogrammes to addresssectoralpriorities,ruraldevelopment and disability.

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Bursary Programmes (HET/FETInstitutions)entered by employed learners.

117 employed learners entered bursary programmes.

BURSARY PROGRAMMES: 75 employed learners entered bursary programmes at TVET /HETinstitutions.

BURSARY PROGRAMMES: 143 employed learners entered bursary programmes.


68 Positivevariance:191%achievementrecorded.Bursaryentries from previousfinancialyearenhancedtheachievementonthistarget. Validated by DHET.

Bursary Programmes (HET/FETInstitutions)completedbyemployed learners.

20 employed learners on bursary programmes certificated.

38 employed learners completedbursaryprogrammes at TVET /HETinstitutions.

16 employed learners on bursary programmes certificated.


-22 Negativevariance:42%oftargetachieved.Slowcompletionrates from grant beneficiariescontributedtothenegativevariance.Thechallengesexperiencedbyfull-timeemployeesto study HET programmes on a part-timebasismustbe addressed by the sector.

Bursary Programmes (HET/FET Institutions)enteredby unemployed learners.

442 unemployed learners entered bursary programmes.

120 unemployed learners entered bursary programmes at TVET / HET institutions.

414 unemployed learners entered bursary programmes.


294 Positivevariance:345%achievementrecorded.This target was supported by a specialprojectimplemented in partnership with the NationalStudentFinancialAidScheme(NSFAS).

Bursary Programmes (HET/FETInstitutions)completedbyunemployed learners.

115 unemployed learnerscompletedbursary programmes.

60 unemployed learnerscompletedbursary programmes at TVET / HET institutions.

60 unemployed learnerscompletedbursary programmes.



WorkplaceExperience/Internships entered by unemployed learners

343 unemployed learners entered structuredworkintegrated learning (WIL) programmes.

INTERNSHIPS / WORKPLACE EXPERIENCE (3-6 months duration): 250 unemployed learners entered structuredWILprogrammes.

INTERNSHIPS / WORKPLACE EXPERIENCE (3-6 months duration): 396 unemployed learners entered work-integrated programmes.


146 Positivevariance:158%achievementrecorded.Improvedmarketingandadvocacyofthisnationalpriorityresulted in many firmsturningtheirworkplacesintotrainingspaces.

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WorkplaceExperience/Internships completedbyunemployed learners.

20 unemployed learnerscompletedstructuredWILprogrammes.





Work-Integrated Learning/ TVET/HET Placementsenteredby unemployed learners post completionofqualification.

220 unemployed learners entered WIL programmes following the completionoftheirqualifications.

WORK INTEGRATED LEARNING - (UNIVERSITIES / UOTS + TVET GRADUATE PLACEMENT)350 unemployed learners entered work integrated internship programmes post completionofqualification(HET:150 and TVET: 200)

WORK INTEGRATED LEARNING - (UNIVERSITIES / UOTS + TVET GRADUATE PLACEMENT)HET: 159 learners entered work integrated internships.


TVET: 201 learners entered work integrated internships.


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Positivevariance:106%achievementrecordedforHETand101%achievementrecordedforTVETplacements.

The FP&M SETA entered into partnerships with identifiedHETandTVETinstitutionsas well as with the SA graduate Development Associationinordertofacilitatetheplacementoflearners.

Work-Integrated Learning/ TVET/HETPlacementscompletedbyunemployed learners postcompletionofqualification.

220 unemployed learnerscompletedWIL programmes following the completionoftheirqualifications.

175 unemployed learnerscompletedwork integrated internship programmes. post completionofqualification(HET:75and TVET: 100).

HET: 97 learners completedwork integrated internships.


TVET: 161 learners completedwork integrated internships.


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Positivevariance:129%achievementrecordedforHETand161%achievementrecordedforTVETplacementscompleted.

The FP&M SETA entered into partnerships with identifiedHETandTVETinstitutionsas well as with the SA graduate Development Associationinordertoenhanceperformanceonthisindicator.

Post graduate Bursary programmes entered by employed/unemployed learners (Honours, MasterandDoctoraldegrees).

10 unemployed learners entered into post-graduate programmes.

POST-GRADUATE BURSARY PROGRAMMES (Honours, Masters and Doctoral degrees):5 employed / unemployed learners entered post-graduate bursary programmes.

POST-GRADUATE BURSARY PROGRAMMES (Honours, Masters and Doctoral degrees):15 employed / unemployed learners entered post-graduate bursary programmes. Funded learners - 15

10 Positivevariance:300%achievementrecorded.

Post graduate bursaries were allocatedtosupporttheincreasedinterest from industry in entering employed learners on post graduate programmes.

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Post graduate Bursary programmes entered by employed/unemployed learners (Honours, MasterandDoctoraldegrees).

5 unemployed learnerscompletedpost-graduate bursary programmes.

3 employed / unemployed learners completedpost-graduate bursary programmes.

3 employed / unemployed learners completedpost-graduate bursary programmes.Funded learners - 3

Targetachieved–nodeviations.

3.3 Programme 3: Promoting the growth of a responsive public TVET college system

NSDSIIIemphasisespartnershipsbetweenDHET,SETAs,employers,privateproviders,andpublicTVETcollegestocreateincreasedcapacitytomeetindustryneedsthroughoutthecountry.TheNationalCertificateVocational(NCV)andN-coursesarerecognisedbyemployersasimportantbasequalifications.Thesequalificationsprovideyoungpeoplewithawaytoobtainadditionalvocationalskillsandworkexperience,andtoenterthe labour market with marketable skills.

TheFP&MSETAisintheprocessofidentifyingTVETcollegeswithrelevantprogrammes.ItwillputpartnershipsinplacetoprovidevocationalcoursesandworkexperienceforTVETcollegelearners.ATVETresearchstudywillbeconductedinthenewfinancialyeartoinformtheTVETstrategy of the SETA going forward.


Strategic Objective: 4.3 Promoting the growth of a responsive public TVET college system







4.3.2 Establish geographicrepresentationingeographicareaswhereFP&Msectoriseconomicallyactiveandestablishrelationshipswith10TVETcolleges.

Discretionarygrantbudget aligned to TVET targets approved.

Fourgenericandthreesector-–specificMemoranda of Understanding (MoUs) signed with publicTVETcollegesto address linkages and partnerships withTVETcolleges.

Bursary agreements between FP&M SETA,workplaces,andTVETinstitutionswereconcluded.

The TVET CollaborationFramework Model hasbeenfinalisedand approved.

Strong working relationshipswith10TVETcollegesdeemed relevant to FP&Msector’sneedsto be established, andassistancewiththe design of FP&M SETAoccupationalprogrammes that suit the needs of the FP&Msectortobeprovided to these TVETcolleges.

11 MoAs signed with PublicTVETcollegesto address TVET strategy.• Sekhukhune

TVET College • Sparrow

TVET Enterprises• Umfolozi

TVET College (2)• FortCox

AgriculturalCollege

• BolandCollege• Elangeni

TVET College • NorthernTechnical

College• Sedibeng

TVET College• FalseBay

TVET College• Ekurhuleni

TVET College


Successfulpartnerships were entered into with TVETcollegesofferingFP&Msectorqualifications.

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4.3.2 Establish geographicrepresentationingeographicareaswhereFP&Msectoriseconomicallyactiveandestablishrelationshipswith10TVETcolleges.

ThedraftISOEstrategy to be approved in the new financialyear.

i. SETA-driven workplaceagreements between TVETcolleges/HEIsand employers.

ii. TVET/HEI –employer/lecturerexchangeprogrammes.

iii.Workexperience/ Internships: The Board approved workexperience/internshipprojectsinNovember 2012 to further address this target.

- Implement TVET/HEI Strategy:i. SETA-driven workplaceagreements between TVETs/HEIs and employers.

ii. TVET/HEI –Employer/lecturerexchangeprogrammes implemented in 2 TVETcolleges.

iii. Work-Integrated-Learning (WIL) projects(TVETgraduateplacement)rolled out in 5 TVET colleges.

iv. Re-tooling & re-skilling of unemployed TVET/HEIgraduates–WorkExperience&Internshipprojectsrolled out in 5 TVET collegesand2HEIsv.3TVETsrecognizedas ISoEs.

- The TVET/HEI strategy as incorporatedintheStrategicPlanhasbeen implemented as follows:

i.Concluded3SETAdrivenworkplaceagreements between TVETs/HEIs and employers.

ii.CapacitybuildingoflecturerswasfacilitatedthroughtheparticipationoflecturersfromTVETs/HEIs in ETDP programmes conductedbytheFP&M SETA.

iii.WILprojects(TVETgraduateplacement)were rolled out in partnerships with 5 TVETs.

iv. Unemployed graduates from 5 TVET Colleges and2HEIsplacedinworkplacesforworkexperience/internships.

v.LeadSETAofficesestablished at False Bay TVET College, College of Cape Town and South Cape TVET College andinstitutionssupported through discretionarygrantfunding.


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4.3.3. Create link/partnership between 3 TVET collegesandlocalskills development initiativese.g.sewingclubs,smallscalefurniture repairs etc.topromotecollaborationwithTVETcolleges.

i. The DHET appointed the FP&M SETA as the lead SETA in the Western Cape to open SETA officesinTVETcollegesintownshipsand rural areas. Thiscollaborationprojectwaslaunchedon 12 September 2013 to promote TVETcollegesaslearninginstitutionsandtofacilitateworkplacementopportunitiesforTVETcollegegraduates. The FP&M SETA Board has approved a further internalprojectof R1,200,000 to implement the lead SETA TVET model. This will be done in conjunctionwiththeSouthCapePublicTVET College, College of Cape Town and False Bay College.

ii. FP&M SETA has beenclusteredwith other SETAs. ExpansionofnationalSETApresenceinrural areas and townships through TVETcolleges.Thisis done through the support of the lead SETA TVET model.

iii.MarketingandpromotionofFP&M programmes delivered via TVET colleges.

Projectsupportfor 3 TVET linked communitysmallscaleprogrammesin targeted communitieswheretheFP&Msectorisrepresented.

• MoAwithFalseBay College to implement communityskillsdevelopment projectintownship of Khayelitsha in Western Cape.

• MoAwithSekhukhune TVET College to implement furniture making skills development projectinthesurrounding community.

• MoAwithBoland College to implement clothingskillsdevelopment projectinthesurrounding area.


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iv.Collaborationagreements and projectsdevelopedwith other SETAs and TVETcollegeswhichis done to promote a FP&MSETApresenceatTVETcolleges:Umgungundlovu TVET College, in partnership with the FP&M SETA and Transport SETA (TETA), hosted an eventon09October2013toofficiallypromote 2013 as the “YearofArtisan”.

4.3.4 Work with TVETs in all geographicalareasto promote the selectionofTVETqualificationsamongstschoolsintherespectiveareas.

Notapplicable i. one (1) Annual careersessionconductedjointlywith TVETs to promote the latest FP&M SETA programmes.

ii. Plans put in placetoensurethat TVET intakes favourartisanalprogrammes, through implementationof3dedicatedprojectstoaddressartisanaldevelopment nationally.

i.DecadeoftheArtisanLaunchin partnership with Ehlanzeni TVET College was held on 8 August 2014 in Nelspruit whichincludedacareerguidanceinterventionandinformationsharingonartisanprogrammes.

ii.DiscretionarygrantsallocatedtoTVETs to implement artisanstraining:• MoAEkurhuleni

TVET College• 2MoUssigned

with TVETs to promote artisanalNstudyprogrammes (WestcolandUmfolozi College).


3.4 Programme 4: Addressing the low level of youth and adult language and numeracy skills to enable additional training

ManySouthAfricanlearnersarepoorlypreparedtotakepartinfurtherlearningwhentheyleaveschoolandcannotaccesspost-schooleducationandtrainingopportunities.Alargenumberofyouthandadultsare“notinemployment,education,ortraining”(NEET).

This programme is focused on assisting unemployed adults and youth (including primary and secondary school learners) to have access toeducationandtrainingopportunities.Thesearedesignedtohelpthemacquireaminimumqualificationatlevel4oftheNQF.

Included inthisarefoundational learningprogrammesandAETprogrammes,aswellasteachertraining initiativestoenhancethequalityofeducationprovidedatschoollevel.

42


Strategic Objective: 4.4 Addressing the low level of youth and adult language and numeracy skills to enable additional training







4.4.1 An analysis ofthescaleofyoung and adult low language and numeracylevelsconductedandanactionplanaligned to budget developed against DGapplicationsreceivedannually.

i. Informed by:

- DiscretionaryGrantApplicationstatisticalreportson young and adult low language numeracylevels.

- QuarterlyLabourForceSurveysfromStats SA.

- Nefaper Reports on youth unemployment.

ii.InOctober2013&March2014,theFP&M SETA Board approved AET Discretionarygrantstomeetthisstrategicobjective.

ii. Detailed report and recommendationsonAETincertainsub-sectorsincludedinFP&MSETASectorSkills Plan 2011-2016.

(a) A report on the scaleofyoungandadult low language andnumeracylevelscompiled.

(b)AnActionPlanlinked to a budget for addressing the low levels of language andnumeracylevelscompiled.

(a)One(1)researchreportcompletedonlow level of young adultliteracyandnumeracy.

(b) AET grants aligned to AET budget approved forimplementationand Dg MoAs signed with employers and training providers to implement AET progranmes for employed and unemployed learners.


AET Levels 1 – 4:

Learners entered AET programmes.

856 unemployed learners entered AET programmes.

AET Levels 1 – 4:


AET Levels 1 – 4:



49 Positivevariance:109%achievementrecorded.AETentries from previousfinancialyearenhancedtheperformanceofthistarget. Validated by DHET.


43







AET Levels 1 – 4:

LearnerscompletedAET programmes.

270 unemployed learners entered completedAETprogrammes.




-50 Negativevariance:81%oftargetachieved.

Slowcompletionratescontributedtothenegativevarianceofthisindicator.Thisprogramme must be supported through a focusedmonitoringintervention.

4.4.2 A minimum of 2 working partnersidentifiedandcollaborativepartnerships forged with youth development organisations&agencies.

Partnership agreements were facilitatedthroughthe approval of AETfixedfundingwindowapplicationsforworkplacesandspecialpilotprojectstoaddressnumeracyandliteracyskillsamongst the youth and adults. These projectswereapproved in October2013andMarch2014:

i.AETfixedfundingwindow:Approximately R3,132, 000 to benefit1,044learners.

ii.Partnershipprojectwith Department of AgricultureForestryand Fisheries - 200 learners: R1,500,000.

2 (a) A minimum of 2Projectpartnershipagreements signed with youth development organisations&agenciestopromoteeducationand training opportunitiesfor unemployed youth through AET programmes.

(b)Bridgingcoursesdeveloped & rolled-out for youth and adults with low language and numeracyskills.

(a) Two (2) MoAs were signed - Department of Agriculture,Forestryand Fisheries (DAFF) and Thuto Adult Centre.

(b) one (1) bridging module programme developed and rolled outfortheprintingsectortosupportapprenticeshipimplementation.


44







iii. Bidvest Paperplus (Pty)Ltd-NationalSeniorCertificatefor Adults and AdvancementfromAET for 70 learners - R350,000.

iv.NumeracyAcademy:Gauteng/Western Cape for 150 learners - R450,000.

v .Edupeg: SupportingprimaryschoolsinEasternCape, Western Cape, and KZN to promote writtenactivitiesthatenhancetheunderstanding ofmathematicaltheories. It also promotes language development and highercognitiveskills: 34,295 beneficiaries–R1,8 million.

vi. Camdeboo Women’sTrust:Camdeboo Satellite AquacultureProject–EasternCapefor30learners - R90,000

3.5 Programme 5: Encouraging better use of workplace-based skills development

TheFP&MSSPidentifiedanumberofkeyareasofcriticalskillsdemandintheFP&Msector.Theseareaswillaffecttheefficacyanddevelopmentalcompetitivenessofthesectorandincludeleadershipandmanagementskills.Thereisclearlyaneedforenhancingleadership-notonlyintermsofsupply,butalsointermsofacontinuityleadership.Therefore,theFP&Msectorshouldfocusitsworkplace-basedskillsdevelopmentmorestrategicallyandshouldaddressthere-skillingandupdatingofcapacityinkeyareaswherecriticalskillsneedshavebeenidentified.Additionally,workplacesmustdevelop‘new’skills,relatingtonewprocessesandtechnology,inordertoincreasetheircompetitivenessandremainsustainable.


45


Strategic Objective: 4.5 Encouraging better use of workplace-based skills development







4.5.1 Mandatory grant Plan for optimumusageofworkplacesformulated in collaborationwithstakeholders.

Total number of submissions: 1,287

526smallfirms

5.1(b)Increasedrates(3%)ofWSPand ATR submission and disbursement of mandatory grants annually.

43%+3%

Smallfirms-1,638

Total number of approved submissions: 1,226

Estimatedbaselineinformation:3,563smallfirms546mediumfirms365largefirms

484smallfirms

Percentageachieved:14%ofsmallfirmssubmitted.

-1,154 Negativevariance:30%oftargetachieved.

Lackofafocusedstrategyandaccurateinformationonsmalllevycompaniestobroadenparticipationinworkplacebasedskills development resultedinanegativevariance.

428mediumfirms 63%+3%MediumFirms - 360

382mediumfirmsPercentageachieved:70%ofmediumfirmssubmitted.


Improvedadvocacyandmarketingofthebenefitsofworkplaceskillsplanning,contributedtotheincreaseinapplicationssubmittedbymediumfirms.

333largefirms 83%+3%LargeFirms- 302

360largefirmsPercentageachieved:99%oflargefirmssubmitted.


Improvedadvocacyandmarketingofthebenefitsofworkplaceskillsplanningcontributedtotheincreaseinapplicationssubmittedbylargefirms.

46








4.5.2 Career management promoted at workplaces.

i. The WSP/ATR analysis report onverticalandhorizontal skills requirements per sub-sectorwascompletedinJune/July 2013.

ii.QCTOqualificationsubmissions make provision for a NoPF alignedtoworkplacerequirements.

iii. Career paths are mapped to qualificationsandcommunicatedeffectivelythroughthe FP&M SETA careerguidancebooklet. This contributestoimprovedrelevanceof training and greater mobility and progression.

iv.Discretionarygrant MoAs, Learnership, Apprenticeship,andSkills Programme Agreements make provisionforcareerorientationanddiscussionoflearningpathways with learners.

iv.Discretionarygrant funding for skills programmes (management, supervisory, team leader,andtechnicalprogrammes) target theimplementationofthisstrategicobjective.Thereisaspecificfocustodevelopmanagement and leadership skills for the FP&M industries. This is designed for professional development.

4.5.2 (a) Career Management ImplementationAgreements putinplaceforoccupationally–directedprogrammes–apprenticeships&learnerships as per targets in 4.2.

Discretionarygrant MoAs signed with employers toaddresscareerpathing through implementationofoccupationally-directedprogrammesincludinglearnerships and apprenticeships.


47







4.5.3 Agreements putinplacewithestablished bodies attheworkplaceforactiveparticipationin ensuring the implementationofaccreditedtraining.

Notapplicable. Employees participatingincareerprogrammesincreasesannuallybybenchmarkingagainst previous year’sparticipationrates for apprenticeships,learnerships & skills programmes for employed learners.

Registrationsonlearning programmes for employed workers on skills programmes, apprenticeshipsand learnerships increasedfrom2,984in 2013/14 to 4,218 in 2014/15.


3.6 Programme 6: Encouraging and supporting cooperative, small enterprises, worker initiated, NGO, and community training initiatives

TheFP&MSSPidentifiedanumberofkeyareasofcriticalskillsdemandforcooperatives,smallenterprises,worker-initiated,NGO,andcommunitytraininginitiatives.Theseareasaffecttheefficacyandsustainabilityoftherespectiveenterprises.

Thisprogrammeaimstoprovidesupporttocooperatives,NGOs,community-basedorganisations(CBOs),andsmallenterprises(SMMEs).Thissupportisprovidedthroughthefundingofskillsdevelopmentandtrainingprojectstoexpandthebusinessandtechnicalskillscapacityoftheseorganisationsandtocontributetosectoreconomicandemploymentgrowthbycreatingopportunitiesforthecreationofnewventures.


Strategic Objective: 4.6 Encouraging and supporting cooperative, small enterprises, worker initiated, NGO, and community training initiatives







4.6.1 A strategy approved by the FP&M SETA Board foridentifyingandsupportingcooperative,smallenterprises, worker initiated,NGOsandcommunityinitiativeswith skills training and development to expand and contributetosectoreconomicandemployment growth.

4.6.1(a)Identifiedcooperative,smallenterprise, worker initiatedNGO,andcommunitytraininginitiativeseligibleforfunding are provided withthenecessarysupport:

i.8%ofDGbudget(20%)allocatedto disability development promotingtechnicalskills and new venturecreations.

4.6.1(a)Cooperative,small enterprise, workerinitiatedNGOandcommunitytraininginitiativeseligible for funding areidentifiedandprovided with the necessarysupportaligned to the following budgets and strategy:

i.Minimum8%ofDGBudget(20%)allocatedtodisabilitydevelopment promotingtechnicalskills and new venturecreations.

(a)Discretionarygrantapplicationsfromcooperative,small enterprise, workerinitiatedNGOandcommunitytraininginitiativeswere evaluated and allocationsweremade to eligible applicants:

(i) A minimum of 8%oftheDGnon-PIVoTAL budget wasallocatedtodisabilityprojects.


48








ii. The rural development strategy needs to be reviewedforcloseralignment with government and sectorpriorities.

iii.20%oftheDg budget allocatedtoruraldevelopment and povertyalleviationprogrammes.

ii. Rural Development Strategy to be reviewedforcloseralignment with government and sectorpriorities.

iii.Minimum20%ofDGBudget(20%)allocatedtoruraldevelopment and povertyalleviationprogrammes.

(ii) The rural development strategy was reviewed and includedintheStrategicPlan.

(iii) A minimum of 20%oftheDGnon-PIVoTAL budget was allocatedtoprojectsaimed at rural development and povertyalleviation.

4.6.2DiscretionaryGrantprojectsapproved to supportidentifiedcooperatives,smallenterprises, worker initiatedNGOs,andcommunityinitiativeswithin the FP&M sectorandtheirimpactmeasuredand reported on.

20cooperatives 20cooperatives/workerorganisations,identifiedandsupported through discretionarygrantprojects.

22cooperatives/workerorganisations,identifiedandsupported through discretionarygrantprojects.


The FP&M SETA entered into partnership agreements with cooperativestoimplement specialprojects.

34 small businesses (SMMEs).

20 small enterprises identifiedandsupported through discretionarygrantprojects.

20 small enterprises identifiedandsupported through discretionarygrantprojects.


42 Ngos, CBos, and NLPEs

3NGOsidentifiedand supported throughdiscretionarygrantprojects.

11NGOsidentifiedand supported throughdiscretionarygrantprojects.


The SETA supported theincreaseddemand to address the MTEF prioritiesofpovertyalleviation,ruraldevelopment and the disability mandate byimplementingprojectsinpartnership with Ngos.

49







3CBOsidentifiedandsupported through discretionarygrantprojects.

6CBOsidentifiedandsupported through discretionarygrantprojects.


The SETA supported theincreaseddemand to address the MTEF prioritiesofpovertyalleviation,ruraldevelopment and the disability mandate byimplementingprojectsinpartnership with CBos.

5NLPEsidentifiedand supported throughdiscretionarygrantprojects.

18NLPEsidentifiedand supported throughdiscretionarygrantprojects.


The SETA supported theincreaseddemand to address the MTEF prioritiesofpovertyalleviation,ruraldevelopment and the disability mandate byimplementingprojectsinpartnership with NLPEs.

3.7 Programme 8: Building career and vocational guidance

InorderforFP&Msectorlearnerstosucceed,theyneedtoreceiveguidancepriortoenrolment,onnotonlythebestmatchfortheirinterestsandtheirabilitiestooccupationalrequirements,butalsothebestprospectsforemployment.Inallcases,theyshouldreceivedecentremuneration.

Informationgatheredandsupportservicesgenerated,needtobesynchronisedcentrallyandmadeavailablenationally.Tothisend,theFP&MSETAhasparticipatedin identifiedcareerexhibitionsacrosstheprovincesandhasmadeinformationavailableoncareeropportunities intheFP&Msector.

50



Strategic Objective: 4.8 Building career and vocational guidance







4.8.1Acareermanagement andvocationalguidancestrategyis developed, contributingtoimprovedrelevanceof training and greater mobility and progression.

Thediscretionarygrant funding strategy was aligned tomeetthisstrategicobjective.

Dedicatedfixedfunding windows for workexperienceandinternships opened to support FP&M sectorworkplacesasorganisationsofchoice:

Workexperience:Approximately 81 FP&M SETA constituentorganisations.

Internships: Approximately 43 FP&M SETA constituentorganisations.

The Board, in collaborationwithstakeholders, approved the followingspecialprojectsinOctober2013andMarch2014 to support this strategicobjective:

i. SAgDA: Career management andplacementof350 unemployed graduates in FP&M sector,constituentorganisations,government departments, municipalities,andTVETinstitutions:R15,350,000.

Strategy must ensure increasedinterestinFP&M SETA training programmes, shown by young people, throughanincreaseddemand for support by a minimum of2constituentstakeholders in order tosupportcareerinitiativesthroughDg grant funding.

ProjectwithVukaniFashions, to present workshops to fashion design students and students in otherdisciplinessuchasmarketing&graphicart,toeducatethemaboutcareerandbusinessopportunitiesinthefashion industry.

ProjectwithSANCOCto develop and implementacareerportal web-based application,tospecificallypromotecareersintheFP&Msector.


51







ii. Impi Training cc:PreparingTVET graduates to enterprintingandpackagingindustryforapprenticeshipmodules: R500,000.

iii. Singisi Forestry Products:Vocationalguidance–trainingandeducationfor40learnersatschoolssurrounding the forestryplantations:R40,000.

v. SSACI: In partnership with FP&M SETA, companiespiloteda new model in artisantrainingintheelectricaltradefor15learners: R1,575,000.

4.8.2LifeOrientationeducatorsofschoolstargetedforpipelineprojectand SDFs trained on FP&M SETA Career Information.

Learners in 179 schoolsreachedthroughparticipationin the following 12 careerexhibitions:

• GovernmentCareerExhibitionEmalahleni, 05 April 2013

• DHETCareerExhibitionatMbizana United MethodistChurch,31 May 2013

• SoshanguveCareerExhibition (giant Stadium), 09 June 2013

• MECforEducationYouthExpoatRatanda, 15 June 2013

• MandelaDayCelebrationsandCareerExhibitionatMalutiTVETCollege in Phuthaditjaba,18-20 July 2013

DISCRETIONARY PROJECT TARGETSCareerinformationmade available to30secondaryschoolsandFP&MSETAparticipatedin5identifiedcareerexhibitions.

Learners and unemployed youth from378schoolsandorganisationswerereachedthroughparticipationinthefollowing22careerexhibitions:

• ArtisanDevelopment Launch:FlaviusMareka TVET College - 01 April 2014

• CollegeofCapeTown open Day, Cape Town: 11 & 12 April 2014

• DHETCareerExpoFalse Bay College MitchellsPlain,Cape Town 23 April 2014

• DHETCareerExpo Mhlontlo Municipality(Tsolo) - 05 May 2014

• NorthlinkCollegeEmployers Day, Cape Town, 15 May 2014.

348schoolsandorganisations.

17exhibitions.

Positivevariance:440%achievementrecordedoncareerexposattendedand1,260%achievementrecordedonschoolsandorganisationsreached.

The SETA was inundated with requests from communities,privateorganisationsand government departments to participateincareerinformationevents.

52







• FalseBayTVETCareer Expo at Mitchell’sPlain, 26 & 27 July 2013

• KZNPublicServicesCareerExhibitioninLadysmith, 30 July to 01 August 2013

• DoLJobsFairfor People with DisabilitiesatVoortrekker Monument, Pretoria, 17October2013

• MthashanaTVETCollege Alumni Event at Nongoma, 07December2013

• DHETCareerExhibitionatStJoseph’sCathedralMarian Hill, Pinetown, 19 January 2014

• YoungCommunistLeague of South Africa10thAnniversary Rally and Career ExhibitionatSharpeville, 02 February 2014

• UmsunduziMunicipalityCareer Expo, 19-20March2014

• NkungumatheSports Day and Careers Expo,

21 June 2014• YoungCommunist

League of SA Career Event - Siyabuswa Library - 21 June 2014

• AlexandraSports Day and Career Expo - Atrex Stadium, Alexandra -

27 June 2014• EasternCapeDept

of Rural Dev and Agrarian Reform Career Expo, Mthatha - 30 June 2014

• NkungumatheSports Day - 19 July 2014

• LGSETASterkspruit Career Expo - 21 July 2014

• CTEXExpo, Cape Town- 23/24 July 2014

• UFETCareerGuidance,Pietermaritzburg - 06 August 2014

• WowDUTExhibitionDay,Durban - 07 August 2014

• NorthlinkCollegeopen Day, Cape Town - 07 August 2014

• ArtisanLaunch-Ehlanzeni TVET College–Nelspruit- 08 August 2014

• TshwaneUniversity of TechnologyCareerExpo, Pretoria - 13 August 2014


53







• DHETKhethaCareerGuidance,Bloemfontein - 21 August 2014

• DHETKhethaCareerGuidance,Khayelitsha - 26 September 2014

• PresidentialImbizo, Pietermaritzburg - 30 September 2014

• DeputyPresident Imbizo, Lichtenburg- 16 November 2014

• UmlaziEntrepreneurship Expo, Durban - 04December2014

54

4. REVENUE COLLECTION

2014/2015 2013/2014

Sources of revenue EstimateActual amount

collected(Over) / Under

collection EstimateActual amount

collected(Over) / Under

collection

R’000 R’000 R’000 R’000 R’000 R’000

SDL levies 318,835 315,742 3,093 324,143 281,362 42,781

Penaltiesandinterest 3,232 7,814 (4,582) 3,049 4,108 (1,059)

Investments 17,500 33,298 (15,798) 17,000 27,055 (10,055)

Donor funding (TLS) - 5,116 (5,116) - 9,474 (9,474)

other revenue - 178 (178) - 419 (419)

Total 339,567 362,148 (22,581) 344,192 322,418 21,774

Duringthecurrentfinancialyear,theFP&MSETAreceivedR315,7millioninskillsdevelopmentlevy(SDL)income.Duringtheyear,SDLthatwaspreviouslynotreceivedbySappiSouthernAfricaLtdwasreceived,hencetheincreaseinSDLincomefromthepreviousyear.

SDLincomewasmonitoredagainstbudgetonamonthlybasis.TheSETAremainedwithinthe10.5%administrationbudgetthresholdforthe2014/15financialyear.

SDLincomewasincreasedbyR1,4millionasaresultofthereversaloftheprovisioninthecurrentfinancialyearforcompaniesthatfallbelowtheR500,000thresholdlevel,andreceiptofthesefundshavenowaccumulatedfor5years.

Penaltiesandinterest(R7,8million)werereceivedbytheFP&MSETAasaresultoflatepaymentofSDLbyemployerstoSARS.

Investmentincomeexceededbudgetbasedontheassumptionthatthemajorityofdiscretionaryfundingwouldbespentduringtheperiodunderreview.However,thisdidnotmaterialiseduetoadelayinthesigningofMOAsbetweentheprojectbeneficiariesandtheFP&MSETA.

Donor funding (R5,1million)was received to fund training interventions.Thesewereapproved in termsof theTrainingLayoffScheme(TLS)and theCreateSA/DepartmentofArtsandCulture (DAC)project.The fundingwas received fromtheDHET,UIF, theWholesaleandRetail (W&R) SETA and Create SA/DAC.

Otherrevenue(R178,000)wasgeneratedfromfeespaidbylearnerstore-writeexaminationsrelatingtoapprenticeshipprogrammes.

4.1 Capital investment

Intermsofimplementingthecapitalinvestment,andassetmanagementplanoftheFP&MSETA,thefollowingprogresshasbeenmade:

• Duringthereportingperiod,allexcessfundsweretransferredmonthlytotheCPDaccountoftheSETAthatisheldwiththeReserveBank.Theexcessfundswerebasedonmonthlycashflowreports.Allinteresthasbeencapitalisedonamonthlybasis.

• Intermsoftheassetmanagementplan,redundantorbrokenassetswereidentifiedandwritten-offduringtheyear.Listedbelowaredetailsofhowassetholdingshavechangedduringtheperiodunderreview,includinginformationonthedisposals,scrapping,andlossasaresultoftheft:o Duringtheyear,assetsvaluedatacostofR888,000(andaccumulateddepreciationofR806,000)werewritten-offbecausetheyhave

been made redundant.• The followingmeasuresweretakentoensurethat theasset registerof theFP&MSETAremainedup-to-dateduringtheperiodunder

review: o Theassetregisterwasupdatedregularlytakingintoaccountallredundantassetsandanyadditionstoassets.Allassetswereassigned

an asset number. Assets were also insured upon delivery.• ThecurrentstateofthecapitalassetsoftheFP&MSETAisasfollows: o 98%ofassetsareinagoodconditionwhilethebalance(2%)areinafairstate.


55

CpARt c: GoveRnAnce

56

1. INTRODUCTION

Corporategovernanceembodiestheprocessesandsystemsbywhichpublicentitiesaredirected,controlled,andheldtoaccount.Inadditiontolegislativerequirementsbasedontheenablinglegislationofapublicentity,andtheCompaniesAct,corporategovernanceisappliedthroughthe precepts of the Public FinanceManagement Act (PFMA). This is run in tandemwith the principles contained in the King’s Report on CorporateGovernance.

Parliament, the Executive Authority (DHET), and the Accounting Authority of the public entity (the FP&M SETA Board), are responsible forcorporategovernance.

2. PORTFOLIO COMMITTEES

TheFP&MSETAwasnotcalledtoappearinfrontofanyoftheParliamentaryPortfolioCommitteesduringtheperiodunderreview.

3. EXECUTIVE AUTHORITY

Duringtheperiodunderreview,theFP&MSETAsubmittedthefollowingdocumentation,withinthestipulatedtimeframes,totheDHETandParliament(whereapplicable):

• Four(4)SETAQuarterlyMonitoringReports(SQMR)for2014/15• FP&MSETAAnnualReport2013/2014• FP&MSETAStrategicPlanfor2015/2016–2019/20• AnnualPerformancePlanfor2015/16–2018/19• ServiceLevelAgreementfor2015/16• MaterialityFrameworkfor2015/16• SectorSkillsPlanfor2015–2020(AnnualUpdate)

4. THE ACCOUNTING AUTHORITY / BOARD

Introduction

TheFP&MSETAisgovernedbyitsConstitutionwhichwasamendedandsignedon23April2013.TheConstitutionisalignedtothestandardConstitutionprovidedtoSETAsbytheDHET.ThemembersoftheFP&MSETABoardareappointedintermsofthisConstitution.

ThestructureoftheFP&MSETABoard,asoutlinedintheConstitution,isasfollows:

• One(1)independentchairperson• Six(6)employerrepresentatives• Six(6)labourrepresentatives• Two(2)independentmembers

Duringtheyearunderreview,10membersregularlyparticipatedinthemeetingsandactivitiesoftheFP&MSETABoard.Two(2)vacanciesexisted-one(1)wasalabourrepresentativeandone(1)anindependentmember.

TheBoardmetsix(6)timesduringtheperiodunderreview.Two(2)ofthemeetingswerespecialboardmeetings.TheBoardalsoparticipatedinatwo-dayFP&MSETAStrategicPlanningsessionheldon15and16September2014.Thepurposeofthesessionwastoprovideinputintothe2015/2016StrategicandAnnualPerformancePlansoftheSETA.

TheBoardhasoperatedaccordingtothepoliciesoftheSETAandmeetingswereconductedinlinewiththeproceduresdetailedintheConstitution.The FP&M SETA subscribed to the principles of good governance as set out in the King III report and duties were carried out objectively andconscientiously.

pARt c: GoveRnAnce

57

Inaddition,theFP&MSETABoardtookintoconsiderationtheinputandadviceofthestandingcommitteesappointedbyit,namelyExecutive,Governance & Strategy, Finance & Projects, Quality Assurance, and HR and Remuneration Committees. An independent Audit Committeeplayed an oversight role to ensure the implementation of sound financial policies and procedures as well as the maintenance of good corporategovernance.

The role of the FP&M SETA Board is as follows:

• GovernandmanagetheSETAinaccordancewiththePFMA,theSkillsDevelopmentAct,andanyotherapplicablelegislation• EnsurethattheSETAachievesitspredeterminedobjectivesandothertargets• ProvideeffectiveleadershipandensurethattheSETAimplementsthegoalsoftheNSDSandthePerformanceAgreementwiththeMinister• ProvidestrategicdirectionfortheSETA• Liaisewithstakeholders• EnsurethattheSETAcomplieswiththerelevantstatutoryrequirementsandtherequirementsofitsConstitution• Manageinstitutionalrisk• MonitortheperformanceoftheSETA• Ensurethat itsmembersandthemembersof thecommittees,establishedbytheBoard,complywiththeCodeofConductsetout in

Annexure2oftheFP&MSETAConstitution.

FP&M SETA Board: From left to right (front row): Mr Mpuka Radinku (Publishing Employers - alternate), Ms Devarani Naidoo (SACTWU), Mr Sipho Ngidi (Independent Chairman), Ms Felleng Yende (FP&M SETA CEO), Ms Abieda Abrahams (SACTWU – alternate)From left to right (back row): Mr Frans Barnard (Textile Employers), Mr Trevor Boltman (Independent Audit Committee Chairman), Ms Jane Molony (Pulp and Paper Employers – alternate), Mr David Bowen (Clothing Employers), Mr Phillip Myburgh (SATU)Absent: Mr Roger Godsmark (Forestry Employers), Ms Susan Khumalo (SACTWU), Mr Andre Kriel (SACTWU), Ms Syriana Maesela (Printing Employers), Mr Thamsanqa Mhlongo (CEPPWAWU), Adv Michelle Odayan (Independent Member), Mr Mike Truelock (Pulp and Paper Employers), Mr Brian Wafawarowa (Publishing Employers)

58

Composition of the Board

Name

Designation (in terms of the Public Entity Board structure)

Date appointed Date resigned Qualifications

Area of expertise

Boarddirectorships (List the entities)

Other committees or task teams (e.g.: Audit committee / Ministerial task team)

Number of meetings attended

Sipho Ngidi Independent chairman

01 April 2011

Not applicable

BachelorofAdministrationIndustrial RelationsDevelopment ProgrammeBachelorofCommerce(Honours) Economics

FinanceHR ManagementIndustrial Relations

Ithala Limited Ithala Limited HR and RemunerationCommitteeReatileTimriteSocialandEthicsCommittee

Governanceand Strategy CommitteeExecutiveCommittee

3 of 6

Frans Barnard

Non-executivemember

13 August 2013

Not applicable

Masters Degree in Industrial RelationsMaster HR Professional, SouthAfricanBoard for People Practices(SAPPP).

StrategicHRManagement, HR Risk Management, Talent Management, WorkforcePlanning, Learning and Development, Industrial Relations,HRTechnologyand Safety / Wellness

South West gauteng TVET College, WESTCoL TVET, Aranda TextileMills,Aranda Learnership College and NationalTextileBargaining Council

HR and RemunerationCommitteeQualityAssuranceCommittee

6 of 6

David Bowen

Non-executivemember

01October2011

Not applicable

BachelorofArtsUniversity EducationDiplomaAdvancedDiploma in EducationMasters in Education

Training and DevelopmentFinanceManagement

Notapplicable ExecutiveCommitteeFinanceandProjectsCommittee

6 of 6

DaphneErasmus

Non-executivemember

01October2011

ResignedJuly 2014

BachelorofArts (Law)Masters inSecurityStudiesManagement Development Programme

HR ManagementBlackEconomicEmpowermentSkills Development and TrainingEmployment Equity

SATU Board of Trustees Pension and Provident Funds

Notapplicable 1 of 6

pARt c: GoveRnAnce

59

Name



Area of expertise




Derick Fredericks

Non-executivemember

01October2011

Resigned August 2014

Printers MechanicFlexible PackagingMachineMinderDiploma in Industrial RelationsCertificatein Audit Learning in the Workplace

HR ManagementIndustrial Relations

Notapplicable ExecutiveCommitteeHR and RemunerationCommitteeGovernanceand Strategy CommitteeFinanceandProjectsCommittee

3 of 6

Roger Godsmark

Non-executivemember

01October2011

Not applicable

BachelorofScience(Honours) AgriculturalEconomics

EconomicsFinance

Notapplicable Governanceand Strategy CommitteeAudit Committee

3 of 6

Susan Khumalo

Non-executivemember

01October2011

Not applicable

grade 12 Labour relations

Notapplicable Governanceand Strategy CommitteeFinanceandProjectsCommittee

4 of 6

Andre Kriel Non-executivemember

01October2011

Not applicable

BachelorofSocialScience

Labour relationsHR Management

Notapplicable ExecutiveCommittee

2 of 6

Thamsanqa Mhlongo

Non-executivemember

13 August 2013

Not applicable


Wood and Paper Bargaining CouncilFurntechCoSATU Central ExecutiveCommittee

HR and RemunerationCommittee

1 of 6

Devaranie Naidoo

Non-executivemember

01October2011

Not applicable


Clothing Bargaining Council(KZN)

QualityAssuranceCommittee

4 of 6

Michelle Odayan

Non-executivemember (Independent member)

01October2011

Not applicable

BachelorofArts (Law) LLBAdvocateofHigh Court of SouthAfrica

LawFinanceStrategyGovernanceProjectManagementHR DevelopmentOrganisationalDevelopment gender Mainstreaming

Court-Consult Africa(PTY)LtdIndiba-AfricaGroup(PTY)LtdMTR Investments (PTY)Ltd

Notapplicable 1 of 6

60

Name



Area of expertise



Number of Meetings attended

Mike Truelock

Non-executivemember

01October2011

Not applicable

NationalDiploma in Organisationand Work StudyNationalDiploma in Personal Management Industrial RelationsDiploma ProgrammeManagement Development Programme

OrganisationalDevelopmentHR ManagementManagementLearning and Development

Santa Barbara Home owners AssociationTruelockAdventurescc

HR and RemunerationCommitteeExecutiveCommitteeFinanceandProjectsCommittee

5 of 6

Brian Wafawarowa

Non-executivemember

01October2011

Not applicable

BachelorofArts (Honours)Masters in LiteratureExecutiveMasters in Business AdministrationMasters of Business Leadership

ManagementPublishing

Notapplicable Governanceand Strategy CommitteeFinanceandProjectsCommittee

0 of 6

Phillip Myburgh

Non-executivemember

Await ministerial approval

Not applicable

Diploma Labour Relations

Labour relations

Trustee ofSATU’sretirementfund.PrincipalOfficerofEmployee benefitsfund.Nonexecdirof Transparent FinancialServices.Chairman of the Statutory CouncilforPrinting,Newspaper andPackagingIndustry

ExecutiveCommitteeGovernanceand Strategy CommitteeFinanceandProjectsCommittee

2 of 6

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Name



Area of expertise



Number of Meetings attended

Syriana Maesela

Non-executivemember

Await ministerial approval

Not applicable

Master in Art ofTeachingBachelorof Art Junior SecondaryTeaching

Strategic& Human ResourcesManagementLeadership DevelopmentOrganisationalDevelopment

Notapplicable HR and RemunerationCommittee

2 of 6

ThefollowingalternatesattendedtheBoardmeetingheldon28May2014,30July2014,12November2014and26March2015:• Forlabour–

o Ms Abieda Abrahamso Mr Thabo Muthwario Ms Bonita Loubsher

• Foremployers–o Mr Mpuka Radinku

Committees

Committee Number of meetings held Number of members Name of members

ExecutiveCommittee 8 5 Sipho Ngidi (Chairman)David BowenPhillip MyburghAndre KrielMikeTruelock

GovernanceandStrategyCommittee 1 8 Sipho Ngidi (Chairman)Abieda AbrahamsPhillip MyburghRoger godsmarkSusan KhumaloJane MolonyBrian WafawarowaVacancyEmployer)

FinanceandProjectsCommittee 2 9 DerickFredericks(Chairman)Roshan BarathDavid BowenSusan KhumaloJerry MakhanyaDevaranie NaidooMikeTruelockBrian WafawarowaPhillip Myburgh

HRandRemunerationCommittee 4 7 MikeTruelock(Chairman)Johann BaardFrans BarnardSyriana MaeselaRashneeRambajanMymoena WilliamsVacancy(Labour)

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Committee Number of meetings held Number of members Name of members

QualityAssuranceCommittee 4 12 Devaranie Naidoo (Chairperson)Abieda AbrahamsJai DeepnarainLanceFaulJerry MakhanyaMatseliso MasimulaPamela NaidooTheresaOttoRashneeRambajanTania RhodeFrans Barnardolga Bezuidenhout

Remuneration of board members

TheFP&MSETAbasesitsBoardremunerationstructureontheNationalTreasuryguidelinesascommunicatedtotheSETAsin2014.Remunerationis reviewed on an annual basis.

Boardmembersqualifyingforremunerationareclassifiedasfollows:• IndependentBoardmembersasappointedbytheMinister• BoardmembersnotdirectlyemployedbytheemployerorthelabourconstituenciestheyrepresentAllBoardmembers,includingthosequalifyingforremuneration,arereimbursedforout-of-pocketexpensesincurredinfulfillingtheirdutiesasBoardmembers.ThisisinlinewiththefinancialpoliciesandproceduresoftheFP&MSETA.

Duringtheperiodunderreview,thefollowingBoardmembersreceivedremuneration/reimbursements:

Name Remuneration Other re-imbursements Total

Sipho Ngidi R232,372 R6,181 R238,553

MichelleOdayan R51,746 R51,746

DerickFredericks R7,800 R7,800

TOTAL R298,099

5. RISK MANAGEMENT

ThefollowingriskmanagementstrategieshavebeenputinplaceattheFP&MSETA:

• TheformationofadedicatedRiskDivisionwiththemandatetomanageriskandoverseetheimplementationofriskmanagementstrategies• ARiskManagementPolicydefiningtheriskappetiteandtolerancelevels• AcomprehensiveRiskRegisterthatreflectsbothstrategic,operationalandexternal risks,withclearactionsthatneedtobetakenby

assignedriskchampions• AninternalRiskManagementCommitteewhichmeetsregularlytomonitortheimplementationofriskstrategies.Thecommitteereports

totheBoard/EXCOandtheAuditCommitteeontheprogressmadetoaddresstheTop10StrategicRisks,Top10OperationalRisks,andTop 10 Fraud Risks

• RiskAssessmentworkshopsareheldregularlytoidentifyemergingrisksandtocompilemitigatingmeasurestoaddresstheidentifiedrisks• InternalAuditplaysanoversightrolebyevaluatingtheeffectivenessoftheriskmanagementprocessinplace.Italsorecommendsareas

ofimprovementtoensuretheefficientrealisationofstrategicandoperationalgoals.TheInternalAuditCoveragePlanisrisk-basedandaddresseshighriskareasidentifiedintermsoftheFP&MSETA‘sRiskProfile.

Progress made in addressing the risks identified

Theidentifiedriskswereaddressedthroughtheimplementationofriskmitigatingmeasuresandactionplans.Thispavedthewayforimprovedregulatorycompliance,tangiblecostsaving,andincreasedoperationaleffectivenessduringtheyearunderreview.

TheFP&MSETAappointedanExecutiveManager:Governance,Risk,ComplianceandLegalinApril2014toensuretheeffectivefunctioningofthe division.

TheAuditCommitteemonitoredtheeffectivenessoftheRiskManagementCommitteeandtheriskmanagementfunction.Itprovidedguidancetostaffintheimplementationofriskmanagementstrategies.

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6. INTERNAL AUDIT AND AUDIT COMMITTEE

Internal audit function

TheInternalAuditors,appointedbytheFP&MSETAduringthepreviousfinancialyear,continuedwiththeimplementationoftheirthree-yearinternal audit plan.

TheinternalauditfunctionreportedfunctionallytotheAuditCommitteeinlinewiththeInternalAuditCharter.Itprovidedobjectiveassuranceregardingthestateof internalcontrol,riskmanagement,andgovernanceprocessesattheFP&MSETA.The inputreceivedfromtheInternalAuditorsandtherisksidentified,asaresultoftheextensiveinternalauditsconductedattheFP&MSETA,contributedtotheeffectivenessoftheorganisationandstrengtheneditsinternalcontrolsystems.

Key activities and objectives of the internal audit

• Reviewtheadequacyandeffectivenessofinternalcontrol,riskmanagement,andgovernanceprocesses• Providereasonableassuranceontheintegrityoffinancialandoperationalinformation• Evaluatetheadequacyofmanagementcontrolsforthepreventionanddetectionoffraud• Provideasourceofinformation,asappropriate,regardinginstancesoffraud,corruption,unethicalbehaviour,andirregularities• Evaluatetheeffectivenessoftheentireriskmanagementsystemandmakerecommendationsforimprovement.

Audit work carried out

TheInternalAuditorsconductedauditsinlinewiththeir2014/2015internalauditplan.Operationalareasthatwerescrutinisedincludedhumanresources and payroll, mandatory grants, governance, projects/discretionary grants, supply chain management, and risk management. Aninformationtechnologyreviewandauditofpredeterminedobjectiveswerealsocarriedout.

Audit Committee

TheindependentAuditCommitteeoftheFP&MSETAcarriedoutitsdutiesduringtheperiodunderreview,accordingtoitsAuditCharter.TheAuditCommitteemetfive(5)timesduringtheyearandwaschairedbyanindependentchairman,asappointedbytheFP&MSETABoard.

The Audit Committee plays a valuable role in ensuring that the organisation embodies ethical conduct, fair practice, and good corporategovernance.TheAuditCommittee,workingwiththeBoardandSETAstaff,overseestheimplementationofrelevantandupdatedpoliciesandproceduresacrossallgovernancestructuresandSETAdepartments.Thisensurestheimplementationofsoundfinancialmanagement,effectiveriskmanagement,andlegalcompliance.

Key activities and objectives of the Audit Committee

• MonitortheperformanceoftheInternalAuditfunction• ReviewtheAnnualRiskAssessmentprocessandprioritisethemajorrisksidentified• Monitortheimplementationofchecksandbalancestoensurecompliancewithpertinentlawsandregulations• AssisttheBoardinreviewingtheintegratedreportinganddisclosure(sustainabilityreporting)• Reviewthefinancialstatementsincludedintheintegratedreportandregardallfactorsandrisksthatmayimpactontheintegrityofthereport.

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ThetablebelowdisclosestherelevantinformationontheAuditCommitteemembers.

Name QualificationsInternal or external

If internal, position in the public entity Date appointed Date resigned


Trevor Boltman CertifiedInternalAuditor (CIA)Certifiedgovernment AuditorCertificationinControl Self-Assessment (CCSA)CertificateinForensicInvestigation

External–Independent

- November 2011 Notapplicable 3 of 5

Karien de Villiers Chartered AccountantBachelorofAccountingScience(BCompt)(Honours) and CTA


- February 2014 Notapplicable 4 of 5

Roger Godsmark BachelorofScience(Honours)AgriculturalEconomics

External–Employer representative

- November 2011 Notapplicable 3 of 5

Sithembiso Ngwenya

Chartered AccountantBachelorofCommerceAccounting(Honours)


- February 2014 Resigned January 2015

5 of 5

Zakariya Suder BachelorofCommerce

External–Labourrepresentative

- January 2012 Notapplicable 3 of 5

7. COMPLIANCE WITH LAWS AND REGULATIONS

TheFP&MSETAhasdevelopedpoliciesandprocedurestoguidefinancialmanagement,HRmanagement,andtheimplementationofoperationalactivities. These documents are reviewed to ensure compliancewith the relevant laws and regulations. Furthermore, the Internal AuditorscontinuallyreviewthecompliancestateoftheSETAintermsoftheapprovedInternalAuditCoveragePlan.AdditionalassuranceisprovidedviacomplianceauditsconductedbyothergovernmentinstitutionssuchasSAQA/QCTOandtheDHET.

TheFP&MSETAcomplieswiththereportingrequirementsasprescribedbyNationalTreasuryandDHET.IthassubmitteditsStrategicandAnnualPerformancePlans,theSectorSkillsPlan,andtheSETAquarterlymanagementreportstimeously.

Internally,theFP&MSETAhasidentifiedareaswherefurthercapacitybuildingisrequired,inordertomeetallcompliancecriteria.Inthisregard,ithasundertakentraininginterventionstostrengthenthecapacityofstaff.

Externally, the FP&M SETA has communicated new developments and changes pertaining to skills development legislation to its broaderstakeholder base. This has been done through workshops, bulk email and its website. These developments have been designed to equip stakeholderswiththenecessaryinformationtomeetregulatoryrequirementstherebyencouragingcompliance.

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8. FRAUD AND CORRUPTION

TheFP&MSETAhasaFraudPreventionPlaninplacetoguidetheentityinitseffortstocurbfraudulentbehaviourthatcouldleadtofinanciallossandreputationaldamage.

Ithasadedicatedtollfreenumber,managedbyanindependentserviceproviderthatisaccessibletointernalandexternalstakeholderstoreportsuspiciousbehaviour.TheprovidersendsmonthlyreportstotheSETAaccordingtoprotocolsapprovedbytheBoard.

Internally, fraud awareness trainingwas conducted to increase awareness of the processes to engagewith in order to identify and reportfraudulent behaviour.

9. MINIMISING CONFLICTS OF INTEREST

TheFP&MSETAhas ‘Declarationof Interest’practices inplaceatall levelsof theorganisation.Staffmembersare required todisclose theirfinancialinterestannually.Additionally,staffintheSCMDivisionmustalsodeclareanyinterestinrelationtotransactionsenteredintowithserviceproviders.Thedeclarationisprintedonthepurchaseorder.

BoardandCommitteemembersarerequiredonanannualbasistodeclareanyfinancialinterestorcommercialactivitiesthatmaybeinconflictwiththeirfunctionsattheSETA.

10. CODE OF CONDUCT

TheCodeofConductcontainedintheConstitution,guidestheconductandperformanceofmembersoftheBoardandcommittees.Itprovidesanethical frameworkforthefunctioningofthegovernancestructuresoftheFP&MSETA.TheCodeofConduct issupportedbypoliciesandproceduresrelatingtothedisclosureofinterestandgifts,aswellastheconfidentialityofinformation.

TheCodeofConductstipulatesthatBoardmembersmust:• StandinafiduciaryrelationshipwiththeFP&MSETA• ComplywithallapplicablelawsandregulationsthatregulatetheactivitiesoftheSETA• Performtheirfunctionsfairly,honestly,andingoodfaith,givingfulleffecttotheobligationsandspiritoftheActandtheConstitution• ProtectandpromotethereputationoftheSETAandpromotegoodwilltowardsit• PerformtheirdutiesconscientiouslyandinthebestinterestoftheSETA• Conductthemselvesethicallyandinaccordancewiththeprinciplesofgoodgovernance

Seriousorcontinuousneglectoftheseduties,oranyothermisconduct,mayresultinamemberbeingremovedfromofficeorhisorherterminationofthemembershipoftheparticularcommitteeoftheSETA.

11. HEALTH, SAFETY, AND ENVIRONMENTAL ISSUES

ItistheresponsibilityoftheFP&MSETAtoensurethesafetyofitsemployees,visitors,andanyotherpersonwhomaybeaffectedbyitsactivities.ItisthereforeimperativefortheFP&MSETAtomaintainasafeworkingenvironmentthatpromotesahealthycultureandcomplies,atleast,withallrelevantlegislationandapprovedcodesofpractice.

TheBoardandmanagementoftheSETAhaveput inplacemeasurestosafeguardtheemployeesandassets(bothphysicaland intellectual),againstexposuretoriskthatcouldarisefromsub-standardpractices,procedures,orconditions.

Comprehensivehealthpolicies,includingHIVAids,andprocedures,havebeendevelopedtoprovideadequatecontrolofhealthandsafetyrisksarisingfromworkactivities.Safetyandsecuritypoliciesandprocedureshavebeenimplementedtoensurethesafetyofstaffandassets.

TheFP&MSETAiscommittedtoprovideasafeandhealthyworkenvironmentthatisconducivetoincreasedproductivityandperformanceandwhichcontributestothementalandphysicalwell-beingofitsemployees.

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12. SOCIAL RESPONSIBILITY

Socialresponsibilityisanessentialcomponentofasuccessfulorganisation,especiallyanorganisationsuchastheFP&MSETAthatoperateswithinthepublicarenaandmanagespublicfunding.TheFP&MSETAdoesnotfunctioninisolationbutisdependentonthesupportofitsconstituentstakeholdersandthecommunityatlarge.

The FP&M SETA Board andmanagement recognise that the SETA’s skills development mandate extends far beyond the provision of skillsdevelopmenttotheemployeesofitsconstituentlevypayingmembers,butalsorequirestheimplementationofinnovativeskillsdevelopmentinitiativesinruralcommunitiesandtownshipsinordertomeettheneedsoflearnersfromdesignatedgroupssuchaspeoplewithdisabilities,youth,andwomenwhowouldordinarilybeexcluded from theseopportunities. These skillsdevelopment interventionsare implemented inpartnershipwithcommunity-basedorganisationsandpublicandprivatetrainingproviders,andprovidethebeneficiarieswiththenecessaryskillstobecomeemployableorself-sustainablethroughthecreationofnewventures.

Inlinewithitsdiscretionarygrantstrategyandbudget,theFP&MSETAallocates8%ofitsspecialprojectsbudgettowardstheimplementationofskills interventions,aimedatassistingpeoplewithdisabilitiesand20%ofthespecialprojectsbudgettowardstheimplementationofskillsinterventionsinruralareas.

TheFP&MSETAsharesthebeliefof“Ubuntu–thatapersonisapersonthroughotherpeople”andthereforewestrivetoaffordpeopleinourbroadercommunitytheopportunitytobenefitfromskillsdevelopmentinterventionsimplementedintheFP&Msector.

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13. AUDIT COMMITTEE REPORT

We are pleased to present our report for the financial year ended 31March2015.

Audit Committee Responsibility

The Audit Committee reports that it has complied with itsresponsibilitiesarisingfromSection51(1)(a)(ii)ofthePublicFinanceManagementActandTreasuryRegulation27.1.TheAuditCommitteealsoreportsthatithasadoptedappropriateformaltermsofreferenceasitsAuditCommitteeCharter,hasregulateditsaffairsincompliancewiththischarterandhasdischargedallitsresponsibilitiesascontainedtherein, except that we have not reviewed changes in accountingpoliciesandpractices.

The Effectiveness of Internal Control

OurreviewofthefindingsoftheInternalAuditwork,whichwasbasedontheriskassessmentsconductedinthepublicentity,revealedcertainweaknesses,whichwerethenraisedwiththepublicentity.

The following internal audit work was completed during the year under review:

• HumanResourceManagementandPayroll• MandatoryGrants• Governance• Projects/DiscretionaryGrants• SupplyChainManagement• InformationTechnologyReview• AuditofPredeterminedObjectives

Thefollowingwereareasofconcern:

• Projectswithspecificreferencetocommitmentsregister

It must be noted that FP&MSETA management has developed and implementedcorrectiveactionstoaddresstheareasofconcernraisedby Internal Audit.

In-Year Management and Monthly/Quarterly Report

ThepublicentityhasreportedmonthlyandquarterlytotheTreasuryas is required by the PFMA.

Evaluation of Financial Statements

TheAuditCommitteehasreviewedanddiscussed:

• The audited Annual Financial Statements to be included in the Annual Report with the Auditor-general and the AccountingAuthority

• Managementletterandmanagement’sresponsethereto

Auditor’s Report

The Audit Committee concurs and accepts the conclusions of theAuditor-General on the Annual Financial Statements and is of theopinion that the audited Annual Financial Statements be acceptedand read together with the report of the Auditor-general and has recommendedthesetotheBoardforadoption.

Mr Trevor BoltmanChairmanoftheAuditCommitteeFP&M SETA31 July 2015

Mr Trevor BoltmanChairman of the Audit Committee

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1. INTRODUCTION

Overview of HR matters at the public entity

TheFP&MSETAisaservicedeliveryorganisationwiththemandatetoprovideskillsdevelopmentadviceandfacilitationtoadiverserangeofstakeholders.Inordertosuccessfullymeetandexceedstakeholderexpectationsintermsofservicedelivery,theorganisationrequirescompetentanddedicatedstaff.TheFP&MSETA’smostvaluableassetsareitshumanresources,andtheFP&MSETAhastakengreatcareduringtheyearunderreviewtomanageitsstaffsuccessfully.

Throughtheeffectivedeploymentofcriticallyskilledpeopleinareasofneed,theFP&MSETAhasensuredincreasedproductivityandefficiencyacross the organisation. Policies and procedures guiding the behaviour of staff aswell as the performance of the organisation, have beenimplementedduringtheyearandtheimplementationthereof,hasbeenmonitoredbythededicatedHRDivision.

TheHRDivisionwassupportedintheexecutionofitsfunctionbytheHR&RemunerationCommittee,whoplayedanadvisoryroleandgenerouslymadeavailabletheirtimeandexpertisetoassisttheDivision.

Inthefinancialyearunderreview,thestaffcomplementtotalled64.

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

Inordertoincreasetheproductivityandefficiencyoftheorganisation,theCEO,MsFellengYende,redesignedtheorganisationalstructureanditsoperationalprocessinresponsetothebusinessmodelthatwasdevelopedtobridgetheperformancegapsthathavebeenidentified.ThemodelwasapprovedbytheBoardinMarch2014,andtheimplementationprocesswascarriedoutfromJune2014onwards.

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

The FP&M SETA takes into account strategic operational and skills development requirements of the organisation, and the principles ofemploymentequityinallrecruitmentandselectionprocesses.

RecruitmentandselectionareundertakenintermsoftheFP&MSETA’svaluesystem,whichisbasedonfairandequitableprinciples.Theseareutilisedtosupportaimsofemploymentequityandworkforceplanning.

Recruitment,selection,transfer,promotion,trainingandadvancementarebasedoncriteriawhichrelatetotheinherentrequirementsofthejob,andtheabilityoftheemployeetoperformthejobadequatelyandsatisfactorily,accordingtoobjectivepredeterminedcriteria.

FP&MSETAcompliesatalltimewithapplicablelegislationandregulations.

Employee performance management framework

TheFP&MSETAimplementedaperformancemanagementsystemandemployees’performancewasevaluatedduringtheyearunderreview.Eligible employees were recognised and awarded a performance bonus. A rigorous approach to recognise and reward performance wasundertakenbytheCEOandherExecutiveteamandthefinaloutcomeandrecommendationswereapprovedbytheBoardinNovember2014.

Employee wellness programmes

Regularinteractionwithstaff,duringstaffandmanagementmeetings,ensuredthattheywerekeptupdatedwithnewdevelopments,organisationalrequirementsandchangesintheSETAenvironment.StaffwerealsogiventheopportunitytocelebrateoccasionssuchasHeritageDay.

Policy development

HRpoliciesandproceduresare inplaceandare reviewedregularlyby theHRandRemunerationCommitteetoensurealignmentwith locallegislationandinternationaltrends.PoliciesareapprovedbytheBoardforimplementation.

Achievements

In linewith its Internship policy, the SETA partnershipwith higher learning institutions continued successfully. Placements of interns in theregionalFP&MSETAofficeswereimplementedinordertoprovideindividualswithexperientiallearningopportunitiesandexposureintherealworldofwork.Theinternshavebeensuccessfullyassimilatedintotheorganisationandareworkingcloselytogetherwiththeirmentorsandcoaches.Theinternsreceivestipendsduringtheirinternships.Overall,theFP&MSETAhasahealthyworkforcewithalowstaffturnover.Staffisdedicatedtotheorganisationandtothedeliveryofserviceexcellenceandsubscribetotheorganisationalvaluesoutlinedearlierinthedocument.

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TheneworganisationalstructurehasincreasedemployeecapacityandthiswillenabletheSETAtoperformoptimally.Aperformancedrivenculturewasemphasisedthroughre-scopingofcertainrolesandtherevisionofjobdescriptions.Theneworganisationstructurewillgiveemployeesanopportunitytooperateinamorechallenging,target-drivenyetexcitingenvironment.

Challenges faced by the public entity

TheforensicinvestigationsundertakenattheFP&MSETAandsubsequentdisciplinaryprocessesweresuccessfullyconcludedandthelessonslearntwerecommunicatedtostaffindifferentforums.

Office Infrastructure

TheFP&MSETArevampeditsJohannesburgofficetoensurethatemployeeshavea‘work-friendly’environment.Procurementprocesseswerefollowedtorenovateareaswhichneededrefurbishment.

Future HR plans / goals

TheHRdivision,throughtheguidanceoftheHRandRemunerationCommittee,plansonundertakingacompetencyandcapabilityauditforallstaff.Thiswillleadtoasalarybenchmarkingexercisewhichwilladdressremunerationandjobcomplexitieswithinoccupationalcategoriesorlevels.Theprocesstoreviewpolicies,tokeepabreastwithchangesinthelegislationthatgovernsthelabourmarket,remainsapriorityandadequatetimewillbeallocatedtoensurecompliance.

There-organisedFP&MSETAhasnotyethadanopportunitytoparticipateinateambuildinginitiative,buthasmarkedthisasanabsolutepriority.Theaimistobuildafullymotivatedfunctionalforce,toensureproperunderstandingofthere-designingoftheorganisationandtheprocessesrequiredtobeacredibleskillsdevelopmentpartner.

2. HUMAN RESOURCE OVERSIGHT STATISTICS

Personnel cost by salary band

LevelPersonnel Expenditure

(R’000)% of Personnel Exp. to

Total Personnel Cost No. of Employees

Average Personnel Cost Per Employee

(R’000)

Top Management 2,622 11% 2 1,311

Senior Management 3,202 13% 5 640

Professionalqualified 7,103 30% 16 444

Skilled 6,871 29% 26 264

Semi-skilled 3,677 15% 28 131

Unskilled 231 1% 4 58

other 174 1% 11 16

TOTAL 23,880 100% 92 260

Performance rewards

ProgrammePerformance Rewards

(R’000)Personnel Expenditure

(R’000)% of Performance Rewards to

Total Personnel Cost Top Management 70 2,622 3%Senior Management 4 3,202 0%Professionalqualified 72 7,103 1%Skilled 68 6,871 1%Semi-skilled 45 3,677 1%Unskilled 5 231 2%other - 174 -TOTAL 264 23,880 1%

Note:BasedonPerformanceevaluationsfor2013/14

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Training costs per division

Programme

Personnel Expenditure

(R’000)

Training Expenditure

(R’000)

Training Expenditure as a

% of Personnel Cost

No. of Employees

Trained

Average Training Cost per Employee

(R’000)

OfficeoftheCEO 2,216 108 5% 2 54

Projects 1,126 16 1% 2 8

QualityAssurance 2,845 66 2% 7 9

Finance 2,413 67 4% 6 11

HR 1,131 52 5% 5 10

Communications&StakeholderEngagement 517 28 5% 3 9

Monitoring&Evaluation 1,492 57 4% 3 19

Governance/Risk/Compliance/Legal 1,442 29 2% 2 15

SCM 846 27 3% 3 9

Research,Planning&Reporting 2,634 58 2% 6 10

IT 490 11 2% 1 11

gauteng Region 1,313 74 6% 6 12

KZN Region 1,757 118 7% 10 12

Western Cape Region 2,827 118 4% 10 12

other 830 177 21% 26 7

TOTAL 23,880 1,006 4% 92 11

Note: i. TrainingforBoardMembersisnotincludedinthetrainingcostsabove.ii. EstimatedcostsofinformaltrainingR732,368(includedontotalcostoftraining).iii. Furthermore,includedintheformaltrainingcostsisETDPtrainingprogrammesfor37staffmembersthatamountedtoR120,270.This

interventionwasfundedthroughaspecialdiscretionarygrantimplementedbytheQualityAssuranceDivision.

Employment and vacancies per division

Division2013/14 as at 31

March 20142014/15

Approved Posts 2014/15

Employees Vacancies %OfficeoftheCEO 2 3 4 - -Research,Planning&Reporting 6 7 6 1 14%Projects 5 2 5 - -QualityAssurance 5 7 9 - -Finance 6 6 8 - -HR 5 5 5 - -Communications&StakeholderEngagement 3 3 3 - -Governance/Risk/Compliance/Legal - 2 2 - -Monitoring&Evaluation 2 3 3 - -SCM 3 3 5 1 33%gauteng Region 6 7 7 - -KZN Region 7 8 10 1 13%Western Cape Region 10 8 11 - -IT 1 1 2 -other * 4 - ** 12 -Total 65 65 92 3 5%

Note:*FourstaffmemberswerepreviouslyemployedintheCorporateAffairsandOperationsDivisions.Thesedivisionsnolongerexist.Note:**InternsandstafffromthedissolvedCorporateAffairsDivision

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Employment and vacancies per salary band (at 31 March 2015)

Programme/activity/objective

2013/2014 No. of Employees

2014/2015Approved Posts

2014/2015No. of Employees

2014/2015 Vacancies % of Vacancies

Top Management 2 2 2 - -

Senior Management 2 4 5 - -

ProfessionalQualified 11 12 16 - -

Skilled 26 24 26

Semi-skilled 20 19 *28 3 15%

Unskilled 4 4 4 - -

other - - **11 - -

TOTAL 65 65 92 3 -

*Includefixedtermstaffwhowerecontractedaftertheirinternshipswereterminated**Interns on work integrated learning programmes (university and TVET graduates)

Employment changes

Salary BandEmployment at

beginning of period Appointments Terminations /

Re-deployment Employment at

end of the period

Top Management 2 0 1 1

Senior Management 2 3 1 4

ProfessionalQualified 11 5 4 12

Skilled 26 2 4 24

Semi-skilled 20 8 9 19

Unskilled 4 - - 4

other *11 - 11 -

Total 76 18 30 64

*Interns on work integrated learning programmes (University and TVET graduates)

Reasons for staff leaving

Reason Number % of total no. of staff leaving

Death - -

Resignation 7 26%

Dismissal 2 7%

Retirement 1 4%

Ill health - -

Expiryofcontract *16 59%

Other(Retrenchment) 1 3%

Total 27 100%

Note:*Expiryofcontract–theseterminationsrefertointernsandfixedtermstaffmemberswhosecontractsexpiredduringtheperiodunderreview.

TheFP&MSETAhasrestructureditsorganisationduringtheperiodunderreviewwhichresultedinanumberofinternalstaffchanges.Additionalpositionswerecreatedontheorganisationalstructure,particularlyatexecutive,seniormanagementandprofessional levels,andwerefilledthrough focused recruitment drives, redeployment, upward promotion and sideward and downward re-deployment. All staff changeswerecarefullyconsideredandalignedtotheskillsneedsoftheorganisation,asidentifiedduringtheorganisationalreviewconductedduring2013/14.

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Labour Relations: Misconduct and disciplinary action

Nature of disciplinary Action Number

Verbal Warning -

WrittenWarning -

FinalWrittenwarning 2

Dismissal 2 Equity target and employment equity status

Note:Adeliberateattemptismadetocomplywiththeapprovedorganogram.Staffretentionprocessesandinternalmovements,i.e.promotionsandredeployment,areencouraged

Levels MALE

African Coloured Indian White

Current Target Current Target Current Target Current Target

Top Management - 1 - - - - - -

Senior Management 3 1 - - 1 1 1 1

Professionalqualified 6 6 - - 1 1 1 1

Skilled 5 4 - - 1 1 2 2

Semi-skilled 4 3 - - - - - -

Unskilled - - - - - - - -

other 5 - 1 - - - - -

TOTAL 23 15 1 - 3 3 4 4

Levels FEMALE

African Coloured Indian White

Current Target Current Target Current Target Current Target

Top Management 1 1 - - - - 1 1

Senior Management - - - - - - - -

Professionalqualified 3 3 - 1 1 - 4 2

Skilled 13 11 1 - 1 - 3 4

Semi-skilled 12 10 3 3 5 5 4 1

Unskilled 4 4 - - - - - -

other 5 2 - - - - - -

TOTAL 38 31 4 4 7 5 12 8 Note:Targetsnotmetduetovacantpositions

Levels Disabled Staff

Male Female

Current Target Current Target

Top Management

Senior Management

Professionalqualified

Skilled 1

Semi-skilled

Unskilled

TOTAL 1

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1. REPORT OF THE AUDITOR-GENERAL TO PARLIAMENT ON THE FIBRE PROCESSING AND MANUFACTURING SETA (FP&M SETA)

Report on the financial statements

Introduction

1. IhaveauditedthefinancialstatementsoftheFibreProcessingandManufacturingSETA(FP&MSETA)setoutonpages78to109,whichcomprise,thestatementoffinancialpositionasat31March2015,thestatementoffinancialperformance,statementofchangesinnetassets,cashflowstatementandstatementofcomparisonofbudgetinformationwithactualinformationfortheyearthenended,aswellasthenotes,comprisingasummaryofsignificantaccountingpoliciesandotherexplanatoryinformation.

Accounting authority’s responsibility for the financial statements

2. Theaccountingauthority is responsible forthepreparationandfairpresentationof thesefinancialstatements inaccordancewiththeSouthAfricanStandardsofGenerallyRecognisedAccountingPractice(SAStandardsofGRAP)andtherequirementsofthePublicFinanceManagementActofSouthAfrica,1999(ActNo.1of1999)(PFMA)andtheSkillsDevelopmentActofSouthAfrica,1998(ActNo.97of1998)(SDA),andforsuchinternalcontrolastheaccountingauthoritydeterminesisnecessarytoenablethepreparationoffinancialstatementsthat are free from material misstatement, whether due to fraud or error.

Auditor-general’s responsibility

3. Myresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonmyaudit.IconductedmyauditinaccordancewiththeInternationalStandardsonAuditing.ThosestandardsrequirethatIcomplywithethicalrequirements,andplanandperformtheaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreefrommaterialmisstatement.

4. Anaudit involvesperformingprocedurestoobtainauditevidenceabouttheamountsanddisclosures inthefinancialstatements.Theproceduresselecteddependontheauditor’sjudgement,includingtheassessmentoftherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror.Inmakingthoseriskassessments,theauditorconsidersinternalcontrolrelevanttotheentity’spreparationandfairpresentationofthefinancialstatementsinordertodesignauditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheentity’sinternalcontrol.Anauditalsoincludesevaluatingtheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesmadebymanagement,aswellasevaluatingtheoverallpresentationofthefinancialstatements.

5. IbelievethattheauditevidenceIhaveobtainedissufficientandappropriatetoprovideabasisformyauditopinion.

Opinion

6. Inmyopinion,thefinancialstatementspresentfairly,inallmaterialrespects,thefinancialpositionoftheFibreProcessingandManufacturingSETA(FP&MSETA)asat31March2015anditsfinancialperformanceandcashflowsfortheyearthenended, inaccordancewiththe SA Standards of gRAP and the requirements of the PFMA and SDA.

Emphasis of matter

7. Idrawattentiontothematterbelow.Myopinionisnotmodifiedinrespectofthismatter.

SETA re-establishment

8. Asdisclosedinnote28ofthefinancialstatements,theFibreProcessingandManufacturingSETAlicenseexpireson31March2016.Asatthedateofthisreport,theministerofHigherEducationandTraininghadnotmadeapronouncementonrenewaloftheSETAlicencebeyond31March2016.

Restatement of corresponding figures

9. Asdisclosedinnote25tothefinancialstatements,thecorrespondingfiguresforthe31March2015havebeenrestatedasaresultofanerrordiscoveredduringthefinancialyearended31March2015inthefinancialstatementsofthepublicentityat,andfortheyearended,31March2014.

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pARt e: finAnciAl infoRMAtion

Report on other legal and regulatory requirements

10. InaccordancewiththePublicAuditActofSouthAfrica,2004(ActNo.25of2004)(PAA)andthegeneralnoticeissuedintermsthereof,Ihavearesponsibilitytoreportfindingsonthereportedperformanceinformationagainstpredeterminedobjectivesforselectedobjectivespresentedintheannualperformancereport,compliancewithlegislationandinternalcontrol.Theobjectiveofmytestswastoidentifyreportablefindingsasdescribedundereachsubheadingbutnottogatherevidencetoexpressassuranceonthesematters.Accordingly,Idonotexpressanopinionorconclusiononthesematters.

Predetermined objectives

11. Iperformedprocedurestoobtainevidenceabouttheusefulnessandreliabilityofthereportedperformanceinformationforthefollowingselectedobjectivespresentedintheannualperformancereportofthepublicentityfortheyearended31March2015:

• Objective2:Increasingaccesstooccupationallydirectedprogrammesonpages30to38• Objective4:Addressingthelowlevelofyouthandadultlanguageandnumeracyskillstoenableadditionaltrainingonpages41to44• Objective5:Encouragingbetteruseofworkplace-basedskillsdevelopmentonpages44to47

12. Ievaluatedthereportedperformanceinformationagainsttheoverallcriteriaofusefulnessandreliability.

13. I evaluated the usefulness of the reported performance information to determinewhether it was presented in accordancewith theNationalTreasury’sannualreportingprinciplesandwhetherthereportedperformancewasconsistentwiththeplannedprogrammes.Ifurtherperformedteststodeterminewhetherindicatorsandtargetswerewelldefined,verifiable,specific,measurable,timeboundandrelevant,asrequiredbytheNationalTreasury’sFrameworkformanagingprogrammeperformanceinformation(FMPPI).

14. Iassessedthereliabilityofthereportedperformanceinformationtodeterminewhetheritwasvalid,accurateandcomplete.

15. Ididnotidentifyanymaterialfindingsontheusefulnessandreliabilityofthereportedperformanceinformationforthefollowingprogrammes:

• Objective2:Increasingaccesstooccupationallydirectedprogrammesonpages30to38• Objective4:Addressingthelowlevelofyouthandadultlanguageandnumeracyskillstoenableadditionaltrainingonpages41to44• Objective5:Encouragingbetteruseofworkplace-basedskillsdevelopmentonpages44to47

Additional matters

16. Although I identified nomaterial findings on the usefulness and reliability of the reported performance information for the selectedobjectives,Idrawattentiontothefollowingmatters:

Achievement of planned targets

17. Refertotheannualperformancereportonpage28to53forinformationontheachievementoftheplannedtargetsfortheyear.

Compliance with legislation

18. Iperformedprocedures toobtainevidence that thepublicentityhadcompliedwithapplicable legislation regardingfinancialmatters,financialmanagementandotherrelatedmatters.Myfindingsonmaterialcompliancewithspecificmattersinkeylegislation,assetoutinthegeneralnoticeissuedintermsofthePAA,areasfollows:

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Annual financial statements

19. Thefinancialstatementssubmittedforauditingwerenotpreparedinaccordancewiththeprescribedfinancialreporting,asrequiredbysection55(1)(a)ofthePFMA.Materialmisstatementsofthebonusprovisionanddiscretionarygrantsexpenditurecommitmentsidentifiedby the auditors in the submittedfinancial statementswere subsequently corrected, resulting in thefinancial statements receiving anunqualifiedauditopinion.

Internal control

20. Iconsideredinternalcontrolrelevanttomyauditofthefinancialstatements,annualperformancereportandcompliancewithlegislation.Themattersreportedbeloware limitedtothesignificant internalcontroldeficienciesthatresultedinthefindingsoncompliancewithlegislationincludedinthisreport.

Leadership

21. Actionplansfortheimplementationoftheauditrecommendationswerenotadequatelyperformed.Asaresulttherewasareoccurrenceofmaterialauditfindings.

Financial and performance management

22. Internalcontrolandreviewmeasureswerenotadequatelyimplementedtoensurethatthecommitmentsregisterandselectedinformationreportedintheannualfinancialstatementwasaccurate.

Pretoria31 July 2015

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2. ANNUAL FINANCIAL STATEMENTS

STATEMENT OF FINANCIAL PERFORMANCEFortheperiodended31March2015

2014/15 2013/14Restated

Notes R’000 R’000

REVENUE Actual Actual

Non-ExchangeSkillsDevelopmentLevy(SDL)Revenue 2.1 315,742 281,362

Non-ExchangeSDLRevenue:PenaltiesandInterest 2.2 7,814 4,108

government grants and Donor Funding 18.1 4,989 -

TrainingLayoffScheme(TLS)-UnemploymentInsuranceFund(UIF) 16 83 1,255

TLS - Wholesale and Retail (W&R) SETA 17 39 3,306

TLS-DepartmentofHigherEducationandTraining(DHET) 15 5 4,913

Investmentincome 3 33,298 27,055

other Revenue 4 178 419

Total Revenue 362,148 322,418

EXPENSES

EmployerGrantandProjectExpenses 5 (397,509) (171,680)

AdministrationExpenses 6 (38,235) (38,127)

government grants and Donor Funding 18.1 (4,989) -

TLS - UIF 16 (83) (1,255)

TLS - W&R SETA 17 (39) (3,306)

TLS - DHET 15 (5) (4,913)

Total Expenses (440 860) (219 281)

NET SURPLUS/(DEFICIT) FOR THE PERIOD (78 712) 103 137


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2. ANNUAL FINANCIAL STATEMENTS continued:

STATEMENT OF FINANCIAL POSITIONAsat31March2015

2014/15 2013/14


ASSETS

Current assets

Cash and Cash Equivalents 11 586,322 613,338

ReceivablesfromNon-ExchangeTransactions 9.1 2,138 25,889

ReceivablesfromExchangeTransactions 9.2 757 635

Inventories 10 159 138

589,376 640,000

Non-current assets

Property, Plant and Equipment 7 2,658 3,804

Intangible Assets 8 140 197

2,798 4,001

Total Assets 592,174 644,001

LIABILITIES

Current Liabilities

TradeandOtherPayables-ExchangeTransactions 13.2 5,141 2,152

TradeandOtherPayables-Non–ExchangeTransactions 13.1 90,403 62,122

GovernmentGrantsandDonorFundingreceivedinadvance 18 8,865 13,150

TLSUIFfundsreceivedinadvance 16 525 581

TLSW&RSETAfundsreceivedinadvance 17 2,265 2,304

W&RSETAfundsreceivedinadvance 14 851 851

DHETfundsreceivedinadvance 15 3,996 4,001

Total Liabilities 112,046 85,161

NET ASSETS 480,128 558,840

NET ASSETS

AdministrationReserve 20 2,798 4,001

Employer grant Reserve 20 - 77

DiscretionaryReserve 20 477,330 554,762

480,128 558,840

TOTAL NET ASSETS AND LIABILITIES 592,174 644,001

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STATEMENT OF CHANGES IN NET ASSETSFortheperiodended31March2015

Administration reserve

Employer grant

reserveDiscretionary

reserveUnappropriated

surplus TotalNotes R’000 R’000 R’000 R’000 R’000

Balance at 1 April 2014 2,565 - 453,138 - 455,703AllocationofUnappropriatedSurplus (1,499) 47,064 57,571 (103,137) -ExcessReservestransferredto DiscretionaryReserve 1 2,935 (46,988) 44,052 103,137 103,137Balanceat31March2014 4,001 77 555,680 - 559,758Errors 25 - - ( 918) - ( 918)Restatedbalance 4,001 77 554,762 - 558,840Opening balance at 1 April 2014 4,001 77 554,762 - 558,840NetsurplusperStatementofFinancialPerformance - - - (78,712) (78,712)AllocationofUnappropriatedSurplus 1 3,155 1,869 (83,736) 78,712 -ExcessReservestransferredtoDiscretionaryReserve (4,358) (1,946) 6,304 - -Balance at 31 March 2015 2,798 - 477,330 - 480,128

CASH FLOW STATEMENTFortheperiodended31March2015

2014/15 2013/14 Notes R’000 R’000

CASH FLOW FROM OPERATING ACTIVITIESOperating Activities CashReceiptsfromstakeholders 348,152 278,038 SDL,PenaltiesandInterestreceived 2 323,556 285,469 OtherCashReceiptsfromstakeholders 24,595 (7,431) Cash paid to stakeholders, suppliers and employees (407,628) (232,169) GrantsandProjectPayments (347,858) (225,357) SpecialProjects (5,116) (9,474) Compensationofemployees (17,771) (19,103) Payments to suppliers and other (36,883) 21,765 Cash generated from/(utilised in)operations 19 (59,476) 45,869 InvestmentIncome 3 33,298 27,055Net cash inflow/(outflow) from operating activities (26,178) 72,924CASH FLOW FROM INVESTING ACTIVITIES PurchaseofProperty,PlantandEquipmentandIntangibles 7 and 8 (838) (3,334)Net cash inflow/(outflow) from investing activities (838) (3,334)Net increase/(decrease) in Cash and Cash Equivalents (27,016) 69,590Cash and Cash Equivalents at beginning of year 11 613,338 543,748Cash and Cash Equivalents at end of year 11 586,322 613,338


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STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS

Budget on Accrual Basis

Statement of Financial Performance

2014/15ActualR‘000

Aproved Budget

R‘000

Approved Reallocations

R‘000Final Budget

R‘000Variance

R‘000SDL 315,742 318,835 - 318,835 (3,093)AdministrationIncome 41,390 41,847 - 41,847 (457)MandatoryGrantIncome 86,348 79,709 - 79,709 6,639DiscretionaryGrantIncome 188,004 197,279 - 197,279 (9,275)

PenaltiesandInterest 7,814 3,232 - 3,232 4,582InvestmentIncome 33,298 17,500 - 17,500 15,798TLS - UIF 83 - - - 83TLS - W&R SETA 39 - - - 39TLS - DHET 5 - - - 5GovernmentGrantsandDonorFundingreceivedinadvance 4,989 - - - 4,989other Revenue 178 - - - 178Total Revenue 362,148 339,567 - 339,567 22,581

Mandatory grant Expenses (84,480) (57,720) - (57,720) (26,760)DiscretionaryGrantExpenses (313,029) (172,378) - (172,378) (140,651)GovernmentGrantsandDonorFundingreceivedinadvance (4,989) - - - (4,989)TLS - UIF (83) - - - (83)TLS - W&R SETA (39) - - - (39)TLS - DHET (5) - - - (5)AdministrationExpenses (38,235) (39,516) - (39,516) 1,281

Total Expenditure (440,860) (269,614) - (269,614) (171,246)Net Deficit (78,712) 69,953 - 69,953 (148,665)

Capital BudgetAssets

Non-Current Assets

Computer Equipment 382 525 (181) 344 38OfficeFurnitureandFittings 92 9 83 92 -OfficeEquipment 248 60 200 260 (12)MotorVehicles - 125 (125) - -Signage - - 3 3 (3)Artwork - - - - -ComputerSoftware 116 100 20 120 (4)

838 819 - 819 19

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ACCOUNTING POLICIES TO THE ANNUAL FINANCIAL STATEMENTSFortheyearended31March2015

1. BASIS OF PREPARATION

The Annual Financial Statements have been prepared on a goingconcern and on the historical basis unless otherwise stated inaccordance with the effective Standards of Generally RecognisedAccountingPractices(GRAP)includinganyinterpretations,guidelinesand directives issued by the Accounting Standards Board and thePublicFinanceManagementAct(PFMA),1999(ActNo.1of1999).

Standard of GRAPGRAP1:PresentationofAnnualFinancialStatementsgRAP 2: Cash Flow StatementsGRAP3:AccountingPolicies,changesinAccountingEstimatesand ErrorsGRAP4:EffectsofchangesinForeignExchangeRatesgRAP 5: Borrowing CostsgRAP 9: Revenue from ExchangeTransactionsgRAP 12: InventoriesgRAP 13: LeasesGRAP14:EventsafterthereportingdategRAP 17: Property, Plant and EquipmentGRAP19:Provisions,ContingentLiabilitiesandContingentAssetsGRAP25:EmployeeBenefitsgRAP 100: Non-Current Assets heldforsaleandDiscontinuedOperationsgRAP 102: Intangible AssetsgRAP 107: Mergers

Replaced Statement of GAAPAC101:PresentationofAnnualFinancialStatementsAC118: Cash Flow StatementsAC103:AccountingPolicies,changesinAccountingEstimatesand Errors

Currently the recognition and measurement principles in theabove gRAP and gAAP Statements do not differ nor result in material differences in itemspresentedanddisclosed in theAnnual FinancialStatements.

The implementationofGRAP1, 2&3has resulted in the followingchangesinthepresentationoftheAnnualFinancialStatements:

Standard of GRAPGRAP1:PresentationofAnnualFinancialStatementsgRAP 2 : Cash Flow StatementsgRAP3:AccountingPolicies,changesinAccountingEstimatesand ErrorsgRAP20:Relatedparties have been issued but is not yeteffectivegRAP 21 : Impairment of Non-CashGeneratingAssetsgRAP 23 : Revenue from Non-ExchangeTransactions(Taxes and Transfers)gRAP24:PresentationofBudgetInformationinAnnualFinancialStatementsgRAP 26 : Impairment of CashGeneratingAssetsgRAP 103 : Heritage AssetsgRAP104:FinancialInstruments

Replaced Statement of GAAPAC101:PresentationofAnnualFinancialStatementsAC 118: Cash Flow StatementsAC103:AccountingPolicies,changesinAccountingEstimatesand Errors

Currently the recognition and measurement principles in theabove gRAP and gAAP Statements do not differ nor result in material differences in itemspresentedanddisclosed in theAnnual FinancialStatements.

The implementationofGRAP1, 2&3has resulted in the followingchangesinthepresentationoftheAnnualFinancialStatements:

1.Terminologydifferences:

Standard of GRAPStatementofFinancialPerformanceStatementofFinancialPositionStatement of Changes in Net AssetsSurplus/DeficitAccumulatedSurplus/DeficitContributionsfromOwnersDistributionstoOwnersReportingDate

Replaced Statement of GAAPIncomeStatement

BalanceSheetStatement of Changes in EquityEquityProfit/LossRetained EarningsShare CapitalDividendsBalanceDate

2.TheCashFlowStatementcanonlybepreparedinaccordancewiththedirectmethod.

3. Specific information has been presented separately on the StatementofFinancialPositionsuchas: (a) Receivables from Non-Exchange Transactions, including Taxes and Transfers;(b) Taxes and Transfers Payable;(c) TradeandOtherPayablesfromNon-ExchangeTransactions.

4.Amountandnatureofanyrestrictionsoncashbalancesisrequired.

The principal Accounting Policies adopted in the preparation of theAnnualFinancialStatementsaresetoutbelowandare,inallmaterialrespects, consistent with those of the previous year, except asotherwiseindicated.


83

2. CURRENCY

The Annual Financial Statements are presented in South AfricanRandssincethatisthecurrencyinwhichthemajorityoftheentity’stransactionsaredenominated.

3. REVENUE RECOGNITION

Revenue is recognised when it is probable that future economicbenefits will flow to the enterprise and these benefits can be reliably measured.

3.1 Levy income

Intermsofsection3(1)and3(4)oftheSkillsDevelopmentLeviesAct,1999(ActNo.9of1999),registeredmembercompaniesoftheSETApayaSkillsDevelopmentLevy(SDL)of1%ofthetotalpayrollcosttotheSouthAfricanRevenueServices(SARS).

80%of SDL are paid over to the SETA (net of the 20% contributiontotheNationalSkillsFund(NSF)). LevyIncomeisrecognisedontheAccrualBasis. The SETA refunds amounts to employers in the form of grants, based on informationfromSARS. WhereSARSretrospectivelyamendstheinformationonSDLcollected, itmayresult ingrants thathavebeenpaidtocertainemployersthatareinexcessoftheamounttheSETAis permitted to have granted to employers. A receivable relating tothe overpayment to the employer in earlier periods is raised at the amountofsuchgrantoverpayment,netofbaddebtsandprovisionforirrecoverableamounts. Revenue is adjusted for Inter SETA transfers due to employerschanging SETAs. Such adjustments are separately disclosed as InterSETAtransfers.TheamountoftheInterSETAadjustmentiscalculatedaccording to the StandardOperatingProcedures issuedbyDHETon 15 May 2007. When a new employer is transferred to the SETA, the SDL transferred by the former SETA are recognised as revenue and allocated to therespectivecategorytomaintainitsoriginalidentity.TheSDLtransferismeasuredatthefairvalueoftheconsiderationreceived. GovernmentDepartments’SDLpaymentsaresetasideintermsoftheDPSAcircularHRD1of2013forthepurpose: AdministrationCostsoftheSETA:10% DiscretionaryGrantsandProjects:20%

SDL income is recognisedwhen it is probable that future economicbenefitswill flow to the SETA and these benefits can bemeasuredreliably.ThisoccurswhenDHETeithermakesanallocationorpayment,whichever comesfirst, to the SETA, as required by Section 8 of theSkillsDevelopmentLeviesact,1999(ActNo.9of1999).

3.2 Penalties and Interest

Penalties and Interest on SDL is recognised on the earlier of thetimetheDHETmakestheallocationorpaymentofthefunds inthebankaccountoftheSETA.

3.3 Government Grants and Other Donor Income

ConditionalGovernmentGrantsandotherConditionalDonorFundingreceived, are recorded as deferred income when they becomereceivableandare then recognisedas incomeona systematicbasisover the period necessary to match the Grants with the relatedcostswhichtheyareintendedtocompensate.UnconditionalGrantsreceivedarerecognisedwhentheamountshavebeenreceived.

3.4 Investment Income

Interest Income is accrued on a time proportion basis, taking intoaccounttheprincipaloutstandingandtheeffectiveinterestrateoverthe period to maturity.

4. GRANTS AND PROJECT EXPENDITURE

AregisteredcompanymayrecoveritstotalSDLpaymentbycomplyingwith the grant criteria in accordance with the Skills DevelopmentRegulations issued in terms of the Skills Development Act 1999 (ActNo9of1999).

4.1 Mandatory grants

Thegrantpayableandtherelatedexpenditurearerecognisedwhentheemployerhassubmittedanapplicationforagrantintheprescribedformwithin theagreedupon cut-offperiodand theapplicationhasbeen approved as the payment thenbecomesprobable. The grantis equivalent to 20% (2013/14 : 20%) of the total SDL paid by theemployerduringthecorrespondingfinancialperiodfortheMandatoryGrantrespectively.

4.2 Discretionary grants

A SETA may, out of any surplus monies, determine and allocateDiscretionaryGrantstoemployers,educationandtrainingproviders,andworkersoftheemployerswhohavesubmittedanapplicationforaDiscretionaryGrantintheprescribedform,withintheagreeduponcut-offperiod. Thegrantpayable,andtherelatedexpenditure,arerecognisedwhentheapplicationhasbeenapprovedtotheextentthattheconditionsofthegranthavebeenmet.

4.3 Project expenditure

Projectexpenditurecomprises:. coststhatrelatedirectlytothespecificcontract;. coststhatareattributabletocontractactivityingeneralandcan

beallocatedtotheproject;and. suchothercostsasarespecificallychargeabletotheSETAunder

thetermsofthecontract.Suchcostsareallocatedusingmethodsthataresystematicandrationalandareappliedconsistentlytoallcostshavingsimilarcharacteristics.

Projectcostsarerecognisedasexpensesintheperiodinwhichtheyareincurredandtotheextentthatconditionsaremet.Areceivableisrecognisednetofaprovisionforirrecoverableamountsforincentiveandotherpaymentsmadetotheextentofexpensesnotyetincurredintermsofthecontract.

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5. COMMITMENTS

CommitmentsaredisclosedwheretheSETAhasinthenormalcourseof itsoperations,enteredintoacontractualagreementwithentitieseitherrelatedtoDiscretionaryGrantsorprojectexpenseswhichhavenotyetbecomedueforpayment.

6. IRREGULAR AND FRUITLESS AND WASTEFUL EXPENDITURE

IrregularExpendituremeansexpenditureincurredincontraventionof,ornotinaccordancewith,arequirementofanyapplicablelegislation,including:

. The PFMA, . TheSkillsDevelopmentAct,. SkillsDevelopmentLeviesAct.

Fruitless and Wasteful Expenditure means expenditure that wasmadeinvainandcouldhavebeenavoidedhadreasonablecarebeenexercised.

All Irregular and Fruitless and Wasteful Expenditure are chargedagainstincomeintheperiodinwhichitisincurred.

7. PROPERTY, PLANT AND EQUIPMENT

Property, Plant and Equipment are stated at historical cost, lessany subsequent accumulated depreciation and adjusted for anyimpairment. An impairment, residual and useful life review is done annually.Thecostmodel isusedas thebasisofmeasurementafterinitial recognition of the asset. Depreciation is calculated on thestraight-linemethodtowriteoffthecostofeachassettoestimatedresidualvalueoveritsestimatedusefullifeasfollows:

Computer Equipment 3 years

OfficeFurnitureandFittings 5 years

OfficeEquipment 4 years

MotorVehicles 3 years

Art and Signage 5 years

The estimated useful life of the assets is limited to the remainingperiod of the licence issued to the SETA by theMinister of HigherEducationandTraining.Forthecurrentyeartheremainingperiodis 2 years.

Where the carrying amount of an asset is greater than its estimatedrecoverableamount, it iswrittendownimmediatelytoitsrecoverableamount.

gains and losses on disposal of Property, Plant and Equipment are determinedbyreferencetotheircarryingamountandaretakenintoaccountindeterminingoperatingprofit.

8. INTANGIBLE ASSETS

ComputerSoftwareandLicences

AcquiredComputerSoftwareandLicencesarecarriedatcost,lessanyaccumulated amortisation and any impairment losses. Amortisationonthesecosts isprovidedtowritedownthe intangibleassets,onastraight-linebasis,over theiruseful life.Where thecarryingamountofanassetregisterisgreaterthanitsrecoverableamount,itiswrittendownimmediatelyto itsrecoverableamount(i.e. impairment lossesare recognised). The gain or loss, on disposal of intangible assets,is determinedas thedifferencebetween the saleproceeds and thecarryingamount,andaretakenintoaccountindeterminingthesurplus.

Software 2 years

Licence Termoflicence

9. INVENTORIES Inventories are statedat the lowerof cost andnet realisable value.Net realisable value represents the estimated selling price in theordinarycourseofbusiness,lessanycostsofcompletionandcoststobeincurredinmarketing,sellinganddistribution.

Cost is determined on the following basis: inventory is valued on invoicedcost.

10. PROVISIONS

Provisions are recognised when the SETA has a present obligationas a result of a past event, and it is probable that this will result in an outflow of economic benefits that can be estimated reliably. Long-termprovisionsarediscountedtonetpresentvalue.TherewerenoprovisionsaccountedforintheAnnualFinancialStatements.

11. ACCRUALS FOR EMPLOYEE ENTITLEMENTS

BonusandLeaveAccrualsarerecognisedduringtheperiodinwhichtheemployeerenderstherelatedservice.BonusandLeaveAccrualsarerecognisedwhentheyaccruetoemployees.Anaccrualismadefortheestimatedliabilityasaresultofservicesrenderedbyemployeesuptothereportingdate.

12. FINANCIAL INSTRUMENTS

Recognition

Financial assets andfinancial liabilities are recognisedon the SETA’sStatementofFinancialPositionwhentheSETAbecomesapartytothecontractualprovisionsoftheinstrument. All ordinary purchases and sales of financial assets are initiallyrecognisedontransactiondate.

Measurement

Financial instruments are initially measured at fair value, whichincludes transaction costs. Subsequent to initial recognition, theseinstruments are measured as set out below.


85

Financial assets

TheSETA’sprincipleFinancialAssetsareaccountsandotherreceivablesandcashandcashequivalents.

ReceivablesfromExchange Carrying Amount

ReceivablesfromNon-Exchange Carrying Amount

Cash and Cash Equivalents Carrying Amount

Investments and loans

Thefollowingcategoriesofinvestmentsaremeasuredatsubsequentreporting dates at amortised cost by using the effective interest ratemethod if they have a fixedmaturity, or at cost if there is no fixedmaturity:- Loansandreceivablesoriginatedbythegroup;- Held-to-maturity investments; - Aninvestmentthatdoesnothaveaquotedmarketpriceinan

activemarketandwhosefairvaluecannotbemeasuredreliably.

Costandamortisedcostareinclusiveofanyimpairmentlossrecognisedto reflect irrecoverable amounts. Thefinancial assets are subject toreviewforimpairmentateachStatementofFinancialPositiondate. Investmentsotherthanthoselistedaboveareclassifiedasavailable-for-sale investments or investments held-for-trading, and are measured atsubsequentreportingdatesatfairvaluewithoutanydeductionfortransactioncoststhatmaybeincurredonsaleorotherdisposal.

Accounts and other receivables

Accounts and other receivables are stated at amortised costs andreduced by appropriate allowances for estimated irrecoverableamountswhicharewrittenoff.

Cash and cash equivalents

Cashandcashequivalentscomprisescashonhand,demanddepositsand other short term highly liquid investments that are readily convertibletoaknownamountofcashandsubjectedtoaninsignificantriskofchangesinvalue,theseareinitiallyandsubsequentlyrecordedat fair value.

Financial liabilities

The SETA’s principal Financial Liabilities are accounts payables.FinancialLiabilitiesaremeasuredinitiallyatfairvaluebutsubsequentlyatamortisedcost.

PayablesfromExchange Carrying Amount

PayablesfromNon-Exchange Carrying Amount

Gains and losses on subsequent measurement

Gains and losses arising froma change in the fair valueof financialinstruments,otherthanavailable-for-salefinancialassets,areincludedinnetprofitorlossintheperiodinwhichitarises.Gainsandlossesarising froma change in the fair valueof available-for-sale financialassetsarerecognisedinequity,untiltheInvestmentisdisposedoforisdeterminedtobe impaired,atwhichtimethenetprofitor loss isincludedinthenetprofitorlossfortheperiod.

Derecognition

Afinancialasset,oraportionthereof,isderecognisedwhentheSETArealisesthecontractualrightstothebenefits,specifiedinthecontract,the rights expire, the SETA surrenders those rights or otherwise loses controlofthecontractualrightsthatcomprisethefinancialasset.Onderecognition, the difference between the carrying amount of thefinancialassetandthesumoftheproceedsreceivableandanyprioradjustmenttoreflectthefairvalueoftheassetthathadbeenreportedinequity,isincludedinnetprofitorlossfortheperiod.

A financial liability, or a part thereof, is derecognised when theobligationspecifiedinthecontractisdischarged,cancelled,orexpires.Onderecognition,thedifferencebetweenthecarryingamountofthefinancialliability,includingrelatedunamortisedcosts,andtheamountpaidforit,isincludedinnetprofitorlossfortheperiod.

Fair value considerations

The fair values at which financial instruments are carried at theStatement of Financial Position date have been determined usingavailable market values. Where market values are not available, fair values have been calculated by discounting expected future cashflowsatprevailinginterestrates.Thefairvalueshavebeenestimatedusing available market information and appropriate valuationmethodologies,butarenotnecessarilyindicativeoftheamountsthattheSETAcouldrealiseinthenormalcourseofbusiness.Thecarryingamountsoffinancialassetsandfinancialliabilitieswithamaturityofless than one year are assumed to approximate their fair value due to theshort-termtradingcycleoftheseitems.

Offsetting

Financial assets and financial liabilities are offset if there is anyintentiontorealisetheassetandsettletheliabilitysimultaneouslyandalegallyenforceablerighttosetoffexists.

13. RESERVES

Equityaresub-classifiedintheStatementofFinancialPositionbetweenthe following funds and reserves: - AdministrationReserve- Employer grant Reserve - DiscretionaryReserve

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This sub-classification is made based on the restrictions placedon the distribution of monies received in accordance with theRegulations issued in terms of the Skills Development Act, 1998 (ActNo.97of1998). MemberemployercompanySDLpaymentsaresetaside intermsoftheSkillsDevelopmentActandtheregulationsissuedintermsoftheAct,forthepurposeof:

2014/15%

2013/14%

AdministrationCostsoftheSETA 10,5 10,5

Employer grant Fund 20 20

Mandatory grants (WorkplaceSkillsPlans) 20 20

DiscretionaryGrantsandProjects 49,5 49,5

80 80

In addition, contributions received frompublic service employers inthenationalorprovincialspheresofgovernmentmaybeusedtopayforitsadministrationcosts.

InterestandpenaltiesreceivedfromSARSareutilisedfordiscretionarygrants. Other income received is utilised in accordance with theoriginalsourceoftheincome.

Thenetsurplus/deficitisallocatedtotheAdministrationReserve,theMandatoryGrantReserveandtheDiscretionaryReservebasedontheabove.TheamountretainedintheAdministrationReserveequatestothe net book value of property, plant and equipment and intangible assets.ExcesscashreservesaretransferedtotheDiscretionaryReserve.

Surplus funds in the Employer grant Reserve are transfered to the DiscretionaryReserveat theendof thefinancialyear.Anamount isretainedintheEmployerGrantReserve,afterconsiderationisgiventonewcompanies,whichintermsoftheregulations,hassixmonthsafterjoiningtosubmittheirworkplaceskillsplans.

14. COMPARATIVE FIGURES

Wherenecessarycomparativefigureshavebeenadjustedtoconformwithchangesinpresentationinthecurrentyear.

15. TAXATION

Noprovisionhasbeenmadefortaxation,astheSETAisexemptfromIncomeTaxintermsofSection10oftheIncomeTaxAct.

16. OPERATING LEASES

PaymentsmadeunderOperatingLeasesaredeductedonarrivingatnetprofit/lossonthestraightlinebasisovertheperiodofthelease.

Aleaseisclassifiedasafinanceleaseifittransferssubstantiallyalltherisksandrewardsincidentaltoownership.

OperatingLeaseisaleaseotherthanafinancelease.

17. RELATED PARTY TRANSACTIONS

TransactionsaredisclosedasotherRelatedPartyTransactionswherethe SETA has in the normal course of its operations entered intocertaintransactionswithentitieseitherrelatedtoDHETorwhichhadanominatedrepresentativeservingontheSETAAccountingAuthority.

TransactionsaredisclosedasotherrelatedpartytransactionswhereInterSETAtransactionsariseduetothemovementofemployeesfromone SETA to another SETA. TheSETAconsiderskeymanagementtobeclassifiedasrelatedparties. 18. EMPLOYEE BENEFITS FP&MSETAsalarieshavebeendisclosedintermsofGRAP25. 19. CASH AND CASH EQUIVALENTS Cash includes cash on hand and cashwith banks. Cash equivalentsare short term, highly liquid investments that are held with registered bankinginstitutionswithmaturitiesofthreemonthsorlessandthataresubjecttoaninsignificantriskofchangeinvalue. FP&MSETAcurrentlyhas funds lodgedwithNedbank,FirstNationalBank,StandardBankandCorporationforPublicDeposits(CPD).


87

NOTES TO THE ANNUAL FINANCIAL STATEMENTSFortheyearended31March2015

1. ALLOCATION OF NET SURPLUS FOR THE YEAR TO RESERVES:

2014/15 NotesTotal per Statement

of PerformanceAdministration

Reserve Employer Reserve Discretionary Reserve

R’000 R’000

Mandatory Grants R’000

Discretionary Grants R’000

Special Projects

R’000

Total Discretionary

R’000

Total Revenue 362,148 41,390 86,348 229,293 5,116 234,409

SDL:Income

AdministrationLevyIncome(10,5%) 41,390 41,390 - - - -

GrantLevyIncome(69,5%) 274,352 - 86,348 188,004 - 188,004

SDL:PenaltiesandInterest 7,814 - - 7,814 - 7,814

government grants and Donor Funding receivedinadvance 4,989 - - - 4,989 4,989

TLS - UIF 16 83 - - - 83 83

TLS - W&R SETA 17 39 - - - 39 39

TLS - DHET 15 5 - - - 5 5

InvestmentIncome 33,298 - - 33,298 - 33,298

other Revenue 178 - - 178 - 178

Total Expenses 440,860 38,235 84,480 313,029 5,116 318,145

AdministrationExpenses 38,235 38,235 - - - -

government grants and Donor Funding receivedinadvance 4,989 - - - 4,989 4,989

TLS - UIF 16 83 - - - 83 83

TLS - W&R SETA 17 39 - - - 39 39

TLS - DHET 15 5 - - - 5 5

Employer grants and ProjectExpenses 397,509 - 84,480 313,029 - 313,029

Net Surplus / (Deficit) per Statement of Performance allocated (78,712) 3,155 1,869 (83,736) - (83,736)

2013/14 NotesTotal per Statement

of PerformanceAdministration

ReserveEmployer Reserve Mandatory Grants Discretionary Reserve

R’000 R’000 R’000

Discretionary Grants R’000

Special Projects

R’000

Total Discretionary

R’000

Total Revenue 322,418 36,628 90,953 185,364 9,474 194,838

SDL:Income

AdministrationLevyIncome(10.5%) 36,628 36,628 - - - -

GrantLevyIncome(69.5%) 244,734 - 90,953 153,781 - 153,781

SDL:PenaltiesandInterest 4,108 - - 4,108 - 4,108

TLS - UIF 16 1,255 - - - 1,255 1,255

TLS - W&R SETA 18 3,306 - - - 3,306 3,306

TLS - DHET 15.1 4,913 - - - 4,913 4,913

InvestmentIncome 27,055 - - 27,055 - 27,055

other Revenue 419 - - 419 - 419

Total Expenses 219,281 38,127 43,888 127,792 9,474 137,266

AdministrationExpenses 38,127 38,127 - - - -

TLS - UIF 16 1,255 - - - 1,255 1,255

TLS - W&R SETA 18 3,306 - - - 3,306 3,306

TLS - DHET 15.1 4,913 - - - 4,913 4,913

Employer grants and ProjectExpenses 171,680 - 43,888 127,792 - 127,792

Net Surplus / (Deficit) per Statement of Performance allocated 103,137 (1,499) 47,064 57,572 - 57,572

88

2. NON-EXCHANGE SDL REVENUE AND PENALTIES AND INTEREST

2.1 Non-Exchange SDL Revenue

2014/15 2013/14

R’000 R’000

ThetotalSDLrevenue,excludingPenaltiesandInterest,pertheStatementofPerformanceisasfollows:

SDLRevenue:Administration 41,390 36,628

SDLreceived 41,390 36,628

SDLreceivedfromSARS 41,211 36,544

SDLreceivedfromDAFF 149 57

Inter SETA transfers in 23 27

Inter SETA transfers out 7 -

SDL Revenue: Employer grants 86,348 90,953




Inter SETA transfers out 44 (157)

SDLRevenue:DiscretionaryGrants 188,004 153,781



SDLreceivedfromDAFF 297 114


Inter SETA transfers out 6 (109)

315,742 281,362

2.2 Non-Exchange SDL Revenue : Penalties and Interest

PenaltiesandInterestreceived 7,814 4,108

7,814 4,108

3. INVESTMENT INCOME

Interestincome-Exchange 33,298 27,055

InterestIncomereceived 33,120 26,949

AccruedInterest 179 106

33,298 27,055

4. OTHER REVENUE

Testingcertificates-Non-Exchange 155 130

DutyCreditCertificate(DCC)-Non-Exchange - 281

InsuranceRefund-Exchange 23 8

178 419


89

5. EMPLOYER GRANT AND PROJECT EXPENSES

2014/15 2013/14Restated

R’000 R’000

Mandatory grants 84,480 43,888

Disbursed 44,486 99,349

Movementinprovisionsandaccruals 39,994 (55,460)

DiscretionaryGrants 249,682 97,923

Disbursed 240,025 96,141

Movementinprovisionsandaccruals 9,657 1,782

NSF/TVETInfrastructure 63,347 29,869

397,509 171,680

6. ADMINISTRATION EXPENSES

2014/15 2013/14Restated


Depreciation 1,785 1,635

Amortisation 173 169

OperatingLeaseRentals(minimumleasepayments) 21 3,528 3,366

Buildings 3,528 3,366

Maintenance,RepairsandRunningCosts 67 127

other Repairs 67 127

Advertising,Marketing,PromotionsandCommunication 141 193

ConsultancyandServiceProviderFees 1,193 278

Legal Fees 25 366

Cost of Employment 6.1 19,823 19,103

TravelandSubsistence 1,450 1,717

StaffTrainingandDevelopment 138 183

RemunerationtomembersoftheAccountingAuthority 329 433

MIS 2,076 2,042

RemunerationtomembersoftheAuditCommittee 34 61

ExternalAuditor’sRemuneration 1,617 1,772

Audit Fees 1,617 1,772

SpecialisedAuditFees 227 2,000

DoubtfulDebts (57) 11

other 5,686 4,671

WorkshopsandFunctions 137 186

Sundry 4,711 3,772

Audit Internal 1,174 934

Computer Expenses 61 12

Cleaning 89 12

StaffWelfare 2 7

Electricity 889 598

90

6. ADMINISTRATION EXPENSES continued

2014/15 2013/14Restated


Bank Charges 38 39

QCTO-Section26HoftheAct 844 509

Insurance 262 287

Motor Expenses 178 129

OfficeExpenses 134 234

Postages 87 102

Equipment Rental - 54

Loss on Asset Disposal 82 91

PrintingandPublications 290 281

ETQA 18 202

Stationery 57 92

SubscriptionsandMemberships 477 169

Security 29 20

Telephone 837 713

38 235 38 127

6.1 Cost of Employment

Salaries and Wages 17,783 17,380

BasicSalaries 15,731 17,175

LeavePayments/AdjustmentofAccruals 2,052 205

SocialContributions 2,040 1,723

MedicalAidContributions 163 178

ProvidentFundContributions:definedcontributionplans 159 204

UIF 80 90

Othersalaryrelatedcosts 1,638 1,251

19,823 19,103

Allocation of cost of employment

AdministrationExpenses 6 19,823 19,103

19,823 19,103

Average number of employees 64 74

6.2 Staff Training and Development

GrantsreceivedfromETDPSETA (49) (55)

StaffTrainingExpenditure 187 238

138 183


91

7. PROPERTY, PLANT AND EQUIPMENT

Cost

Accumulated depreciation/

impairment

Closing carrying amount

For the period ended 31 March 2015 R’000 R’000 R’000Computer Equipment 2,080 (1,481) 599OfficeFurnitureandFittings 6,223 (4,930) 1,293OfficeEquipment 1,875 (1,180) 696MotorVehicles 141 (126) 15Signage 172 (172) -Artwork 279 (223) 55

10,770 (8,112) 2,658

For the period ended 31 March 2014Computer Equipment 1,919 (1,191) 728OfficeFurnitureandFittings 6,550 (4,626) 1,923OfficeEquipment 1,875 ( 850) 1,025MotorVehicles 141 ( 126) 14Signage 172 ( 171) 2Artwork 279 ( 168) 112

10,936 (7,132) 3,804

AssetscostingR529,000thathaveazerovaluearestillinuse.

Movement summary 2015 Carrying amount

2014 Additions DisposalsDepreciation

charge

Accumulated Depreciation on disposals

Carrying amount

2015

R’000 R’000 R’000 R’000 R’000 R’000

Computer Equipment 728 382 (221) (501) 211 599

OfficeFurnitureandFittings 1,924 92 (419) (662) 359 1,293

OfficeEquipment 1,025 248 (248) (565) 236 696

MotorVehicles 15 - - - - 15

Artwork 111 - - (56) - 55

Signage 1 - - ( 1) - -

Balance at end of March 2015 3,804 722 (888) (1,785) 806 2,658

Movement summary 2014 Consolidated carrying amount

2013 Additions DisposalsDepreciation

charge

Accumulated Depreciation on disposals

Carrying amount

2014

R’000 R’000 R’000 R’000 R’000 R’000

Computer Equipment 523 491 (590) (281) 585 728

OfficeFurnitureandFittings 1,548 1,371 (235) (922) 162 1,924

OfficeEquipment 245 1,179 (296) (383) 280 1,025

MotorVehicles 7 - - 8 - 15

Artwork 167 - - (56) - 111

Signage - 2 - (1) - 1

Balance at end of March 2014 2,490 3,043 (1,121) (1,635) 1,027 3,804

92

8. INTANGIBLE ASSETS

Cost Accumulated amortisation

Closing carrying amount

For the period ended 31 March 2015 R’000 R’000 R’000ComputerSoftware 411 (271) 140

411 (271) 140

For the period ended 31 March 2014ComputerSoftware 295 (98) 197

295 (98) 197

Consolidated carrying amount 2014 Additions Amortisation charge

Carrying amount 2015

Movement summary 2015 R’000 R’000 R’000 R’000ComputerSoftware 184 116 (173) 127SoftwareLicences 13 - - 13Balance at end of March 2015 197 116 (173) 140

Carrying amount 2013 Additions Amortisation charge

Carrying amount 2014

Movement summary 2014 R’000 R’000 R’000 R’000ComputerSoftware 62 291 (169) 184SoftwareLicences 13 - - 13Balance at end of March 2014 75 291 (169) 197


93

9. RECEIVABLES FROM NON-EXCHANGE TRANSACTIONS AND EXCHANGE TRANSACTIONS

2014/15 2013/14Restated

Notes R’000 R’0009.1 Receivables from Non-Exchange Transactions

2,138 25,889Inter SETA Debtors 25.1 3 29EmployerReceivablesoverpaymentsduetoSARSreversals 9.1.1 17 24,087other Debtors 688 343TLS W&R SETA 254 254TLS UIF 1,176 1,176

2,138 25,889

9.1.1 Employer Receivable

Employer Receivableoverpayment to employers 180 24,337

180 24,337

Allowancefordoubtfuldebts (163) (250)Opencarryingamount (250) (239)Increase/(decrease)incurrentyearprovision 87 (11)

NeteffectofSARSretrospectiveadjustmentsonaffectedemployers 17 24,087

R180,000wasrecognisedasareceivablerelatingtotheoverpaymenttotheemployerinearlierperiodsandisbasedontheamountofsuch grant overpayments.

9.2 Receivables from Exchange Transactions 757 635

Deposits 338 335

Sundry Debtors 260 143

Prepaid Expenses 159 157

757 635

94

10. INVENTORIES

2014/15 2013/14


Openingcarryingamount 138 112

Purchases 147 229

Amountsutilised (126) (201)

159 138

Inventorycomprisescartridges,paper,kitchenitemsandotherconsumables.

11. CASH AND CASH EQUIVALENTS

Cash at bank and on hand 586,322 613,338

Cash at bank 561,756 589,524

Donor Funds held 24,552 23,800

Cash on hand 14 14

Cash and cash equivalents at end of March 2015 586,322 613,338

AsrequiredinTreasuryRegulation31.2,NationalTreasuryapprovedthebankswherethebankaccountsareheld.

ForthepurposeoftheCashFlowStatement,cashandcashequivalentscomprisecashonhandanddepositsheldattheCorporationforPublicDepositsandincallaccounts.

12. SURPLUS FUNDS TRANSFERABLE TO NATIONAL TREASURY

TransfersofExcessFundsfrom:

DiscretionaryReserve 477 330 554,762

AmountstransferredtoAdministrationReserve 2,798 4,001

Applicationforapprovalforaccumulation (480,128) (558,763)

Closing carrying amount - -

Surplus funds due to NSF

TotalsurplusesasperStatementofFinancialPerformance: (78,712) 103,137

Cash and Cash Equivalents 586,322 -

TradeandOtherReceivables 2,895 -

Sub-Total 589,217 -

DeductShortTermLiablilites (79,318) -

Surplus Funds before Commitments 509,899 -

Less2014/15and2013/14CommittedFunds 451,676 (326,349)

TotalSurplus/(Deficit)afterCommitments 58,223 (326,349)

5%RetentionofTotalDiscretionaryReserves (25,495) -

32,728 (223,212)

Duringthefinancialyear,theSETArealisedadeficitontheStatementofFinancialPerformance.Thiswasmainlyduetotheincreaseinexpenditureondiscretionarygrants.


95

13. TRADE AND OTHER PAYABLES NON-EXCHANGE AND EXCHANGE TRANSACTIONS

2014/15 2013/14Restated


13.1 Trade and Other Payables Non – Exchange Transactions 90,403 62,122

TradeandOtherPayablesNon-ExchangeTransactions:MandatoryGrants 29,392 13,468

TradeandOtherPayablesNon-ExchangeTransactions:DiscretionaryGrants 22,893 13,236

NSF 32,728 29,869

SARS payable 13.3 5,227 5,328

Inter SETA payables 24.1 163 221

13.2 Trade and Other Payables – exchange transactions 5,141 2,153

Sundry payables 1,742 982

Straight-lining of Rent 200 191

Bonus payable 2,421 -

Leave payable 778 980

13.3 SARS Payables Opening balance Change in estimate Additions Closing balance

For the period ended 31 March 2015 R’000 R’000 R’000

SDLincorrectlyreceived 5,328 (1,428) 1,327 5,227

5,328 (1,428) 1,327 5,227

DuringthefinancialyeartheSETAhadreviseditsestimateinlinewithguidancereceivedfromDHETregardingthetreatmentoftheSDLreceivedbelow R500,000.

The change in estimate amounted toR1,429,000whichhad increased thediscretionary reserves. The effect is a reductionof theprovision by R1,429,000.

For the year ended 31 March 2014

SDLincorrectlyreceived 10,316 (6,276) 1,288 5,328

10,316 (6,276) 1,288 5,328

DuringthefinancialyeartheSETAhadreviseditsestimateinlinewithguidancereceivedfromDHETregardingthetreatmentofSDLreceivedbelow R500,000.

The change in estimate amounted to R6,276,000which had increased the discretionary reserves. The effect is a reduction of the provsion by R6,276,000.

14. W&R SETA AND CTFL SETA JOINT COLLABORATION PROJECT

2014/15 2013/14

R’000 R’000

Openingbalance 851 851

Closing balance 851 851

15. DHET

Openingbalance 4 001 2,480

Receivedduringtheyear - 6,434

W&RSETAJointCollaborationProject-Learnership - 6,434

Utilisedandrecognisedasrevenue-conditionsmet: (5) (4,913)

Closing balance 3,996 4,001

96

16. TLS - UIF

2014/15 2013/14

R’000 R’000

Openingbalance 581 1,086

Receivedduringtheyear 27 496

Accruedamount - 254

Company disbursements (83) (1,255)

Closing balance 525 581

17. TLS - W&R SETA

Openingbalance 2,304 -

Receivedduringtheyear - 5,610

Utilisedandrecognisedasrevenue-conditionsmet: (39) (3,306)


18. GOVERNMENT GRANTS AND DONOR FUNDING RECEIVED IN ADVANCE

Create SA

Openingbalance 11,262 10,753


Utilisedandrecognisedasrevenue-conditionsmet: (4,989) -


Department of Arts and Culture

Openingbalance 1,888 1,802



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

NetSurplus/(Deficit)asperStatementofFinancialPerformance (78,712) 103,137

Adjustedfornon-cashitems:

DepreciationandAmortisation 1,958 1,803

(Profit)/lossondisposalofProperty,PlantandEquipment 82 91

Allowancefordoubtfuldebts (57) 11

RelatingtoEmployment 2,052 -

Adjustedforitemsseparatelydisclosed

InvestmentIncome (33,298) (27,055)

Adjustedforworkingcapitalchanges:

(Increase)/decreaseinreceivables 23,691 (21,236)

Increase/(decrease)inpayables 24,831 (10,857)

(Increase)/decreaseininventory (23) (25)

Cash generated from/(utilised in) operations (59,476) 45,869


97

20. CONTINGENCIES

Surplus Funds

IntermsofthePFMA,allSurplusFundsasatyear-endmaybeforfeitedtoNationalTreasury.TheamendedgrantregulationsdefinesurplusasafavourableresidualbalanceintheStatementofFinancialPerformanceforthefinancialyearendingon31Marchlesscommitmentstotrainingoflearnersinprogrammesfundedfromdiscretionaryfunds.‘Commitments’inthiscontextmeanthatcontractualobligationsexistattheendofthefinancialyearthatwillobligetheSETAtomakeapaymentoragreement(writtenwithspecifictermsbetweenaSETAandthirdpartywherebythethirdpartyundertakestoperformsomethinginrelationtoadiscretionaryprojectforwhichaSETAwillbeobligedtomakepaymentagainstthediscretionarygrantshouldanapplicationforretentionofsurplusfundsbedenied.Wehaveonthe31May2015submittedanapplicationtotheDHETforretentionofsurplusfundsandretainfundsusedforinternalprojects.Reservescarriedoverfromthepreviousfinancialyear,outsideofthedefinitionofsurplus,havebeendisclosedasacontingentliabilityandrequestforapprovalforthesefundshasbeensubmittedtoNationalTreasury.AsinthepreviousyearFP&MSETAexpectsthatNationalTreasurywillapprovetheretentionofsurplusfunds.

2014/15 2013/14R’000 R’000

AdministrationReserve 2,798 4,001Employer grants Reserve - 77DiscretionaryReserve 477,330 554,762Total Funds as per Statement of Financial Position 480,128 558,839

21. OPERATING LEASES

Totaloffutureminimumleasepaymentsundernon-cancelableleases:Not later than one year 3,225 2,597Laterthanoneyearandnotlaterthanfiveyears - 2,824

3,225 5,421

TheOperatingLeasesrelatetobuildingpremisesusedasofficeaccommodation.ThecurrentleaseagreementsinDurban,for2ndand3rdfloorofficepremisesinUmdoniCentre,Pinetown,havebeenextendedto31March2016.TheCapeTownandBraamfonteinofficesleasesexpireattheendofMarch2016.Annualescalationforallthreeregionsamountsto9%.

22. MATERIAL LOSSES THROUGH CRIMINAL CONDUCT, IRREGULAR AND FRUITLESS AND WASTEFUL EXPENDITURE

Interest on Finance Lease / Cancellation of MIS / Cancellation of Discretionary Grant Workshops

ReconciliationofFruitlessandWastefulExpenditureRelatingtoPriorYearnotCondoned 179 179Fruitless and Wasteful Expenditure 179 179

Irregular Expenditure

SCM Legislative regulations not adhered to

ReconciliationofIrregularExpenditureRelatingtoPriorYearnotCondoned 4,966 3,794RelatingtoCurrentYear 1,250 1,172Irregular Expenditure awaiting condonation 6,216 4,966

Theservicesweredeliveredandtheinternalcontrolshavebeenmodifiedtopreventre-occurrenceofirregularexpenditure.Thecurrentyear’sexpenditurerelatestolongtermcontractsthathavebeenfoundtobeirregularinthepriorfinancialyears.

98

23. FINANCIAL INSTRUMENTS

InthecourseoftheSETAoperationsitisexposedtointerestrate,credit,liquidityandmarketrisk.TheSETAhasdevelopedaComprehensiveRiskStrategyintermsofTR28.1inordertomonitorandcontroltheserisks.Theriskmanagementprocessrelatingtoeachoftheserisksisdiscussedunder the headings below.

Interest rate risk

TheSETAmanagesitsinterestrateriskbyinvestinginthefinancialinstitutionsapprovedbyNationalTreasury.

TheSETA’sexposuretointerestrateriskandtheeffectiveinterestratesonfinancialinstrumentsatStatementofFinancialPositiondate,areasfollows:

Floating rate Non-interest bearing

AmountR’000

Effective interest rate

AmountR’000

TOTAL R’000

Year ended 31 March 2015

Assets

Cash and Cash Equivalents 586,322 6% - 586,322

Total Financial Assets 586,322 6% - 586,322

Liabilities

TradeandOtherPayables-Non-ExchangeTransactions - - (5,141) (5,141)

TradeandOtherPayables-ExchangeTransactions - - (90,403) (90,403)

W&RSETAfundsreceivedinadvance - - (851) (851)

TLS - W&R SETA - - (2,265) (2,265)

TLS - UIF - - (525) (525)

TLS - DHET - - (3,996) (3,996)

Create SA - - (6,876) (6,876)

Department of Arts and Culture - - (1,989) (1,989)

Total financial liabilities - - (112,046) (112,046)

Year ended 31 March 2014

TotalFinancialAssets 613,338 6% - 613,338

TotalFinancialLiabilities

TradeandOtherPayables-Non-ExchangeTransactions - - (2,152) (2,152)

TradeandOtherPayables–ExchangeTransactions - - (62,122) (62,122)

W&RSETAfundsreceivedinadvance (851) (851)

TLS - W&R SETA - - (2,304) (2,304)

TLS - UIF - - (581) (581)

TLS - DHET - - (4,001) (4,001)

Create SA - - (11,262) (11,262)

Department of Arts and Culture - - (1,888) (1,888)

613,338 - (85,161) (85,161)


99

Credit risk

Financialassets,whichpotentiallysubjecttheSETAtotheriskofnon-performancebycounterpartiesandtherebysubjecttocreditconcentrationsofcreditrisk,consistmainlyofcashandcashequivalents,investmentsandaccountsreceivable.Themaximumexposuretocreditriskisequaltothecarryingamountofthefinancialinstruments.

The Ageing of Trade and Other Receivable from Non-Exchange Transactions:

2014/15 2013/14

Gross Gross

Not past due - -

Past due 0 - 30 days - -

Past due 31 - 120 days 2,139 25,889

More than one year - -

The Ageing of Trade and Other Receivable from Exchange Transactions:

Not past due - -

Past due 0 - 30 days 260 143

Past due 31 - 120 days 159 157

More than one year - deposits 338 335

Cash and Cash Equivalents:

Not past due 586,322 613,338



More than one year - -

TheSETAlimitsitstreasurycounter-partyexposurebyonlydealingwithwell-establishedfinancialinstitutionsapprovedbyNationalTreasury.ThisisimplementedinlinewithitsInvestmentPolicy,approvedintermsofTreasuryRegulations.TheSETA’sexposureiscontinuouslymonitoredbytheExecutiveCommittee.

Credit riskwith respect toSDLpayingemployers is limiteddue to thenatureof the income received.TheSETAdoesnothaveanymaterialexposure to any individual or counter-party. The SETA’s concentration of credit risk is limited to the industry in which the SETA operates. Nosignificanteventsoccurredintheindustryduringthefinancialyearthatmayhaveanimpactontheaccountsreceivablethathasnotbeenadequatelyprovidedfor.Accountsreceivablearepresentednetofallowancefordoubtfuldebt.

Liquidity risk

TheSETAmanagesliquidityriskthroughpropermanagementofworkingcapitalandcapitalexpenditure.Adequatereservesandliquidresourcesare maintained.

2014/15 Carrying Amount

Contractual Cash Flows

6 months or less 6 - 12 months 1 - 2 years

Tradeandotherpayablesfromexchangetransactions 5,141 5,141 1,742 - 978

2013/14

TradeandotherPayablesfromexchangetransactions 2,153 2,153 982 - 980

100

23. FINANCIAL INSTRUMENTS continued:

Market risk

The SETA is exposed to fluctuations in the employmentmarket i.e. sudden increases in unemployment and changes in thewage rates.NosignificanteventsoccurredduringtheyearthattheSETAareawareof.

Fair values

The SETA’sfinancialinstrumentsconsistmainlyofcashandcashequivalents,accountsandotherreceivables,andaccountsandotherpayables.Nofinancialinstrumentswerecarriedatanamountinexcessofitsfairvalue.

Nofinancialassetwascarriedatanamountinexcessofitsfairvalueandfairvaluescouldbereliablymeasuredforallfinancialinstruments.

Thefollowingmethodsandassumptionsareusedtodeterminethefairvalueofeachclassoffinancialinstruments:

Cash and cash equivalents

Thecarryingamountofcashandcashequivalentsapproximatesfairvalueduetotherelativelyshort-termmaturityofthesefinancialassets.

Accounts Receivable

Thecarryingamountofaccountsreceivable,netofallowanceforimpairment,approximatesfairvalueduetotherelativelyshort-termmaturityofthesefinancialassets.InterestisleviedattheprescibedrateasdeterminedbytheActshouldemployerspaySDLlate.Thisinterestisthentransferred to the SETA via DHET.

Accounts Payable

Thecarryingamountofaccountsandotherpayablesapproximatesfairvalueduetotherelativelyshort-termmaturityofthesefinancialliabilities.


101

24. RELATED PARTY TRANSACTIONS

24.1 Transactions with other SETAs

InterSETAtransactionsandbalancesariseduetothemovementofemployersfromoneSETAtoanotherSETA.NoothertransactionsoccurredduringtheyearwithotherSETAs.TheparententityofallSETAsisDHET.

Thebalancesatyear-endincludedinreceivablesandpayablesare:

2014/15 2013/14

R’000 R’000

NotesAmount of the

transactionAmount receivable/

(payable)Amount of the

transactionAmount receivable/

(payable)

Receivables 9 107 3 66 29

MICT SETA - - 51 20

W&R SETA 107 - 9 -

AgriSETA - 3 - 3

FASSET - - 6 6

Payables 14 - (163) (108) (221)

MerSETA - - (9) -

MICT SETA - (81) (93) (81)

AgriSETA - (79) (6) (140)

ServicesSETA - (3) - -

Total 107 (160) (42) (192)

102

24.2 Transactions with other related parties

DuringtheyearmembersoftheAccountingAuthorityandemployeeswererequiredtodisclosetheirinterestinanycontractsthattheSETAisenteringintowithanoutsideparty.AsaresulttheSETAenteredintothefollowingtransactionswithrelatedparties:

2014/15 R’000

2013/14 R’000

Related Party Nature of Relationship Transaction Type

Amount of the

Transaction

Amount Receivable/

Payable

Amount of the

Transaction

Amount Receivable/

Payable

38,325 3,202 14,604 1,271

ZenzeleniClothing(PTY)Ltd Andre Kriel (Authority Member) Mandatory grants 23 9 - -

Sappi SA Ltd MikeTruelock(AuthorityMember) Mandatory grants 10,001 1,863 - -

Sappi SA Ltd MikeTruelock(AuthorityMember) DiscretionaryGrants 4,400 - 1,179 -

Publishers'AssociationofSouthAfrica(PASA)

Brian Wafawarowa (Authority Member) DiscretionaryGrants 1,870 132 477 -

PearsonHoldingsSA(PTY)LtdBrian Wafawarowa (Authority Member) Mandatory grants 264 21 - -

PearsonHoldingsSA(PTY)LtdBrian Wafawarowa (Authority Member) DiscretionaryGrants 90 - - -

CaxtonAssociates Daphne Erasmus (Authority Member) DiscretionaryGrants - - 753 -

CaxtonAssociates Daphne Erasmus (Authority Member) Mandatory grants 598 116 122 -

CTP Limited Daphne Erasmus (Authority Member) DiscretionaryGrants 5,511 209 3,514 1,200

CTP Limited Daphne Erasmus (Authority Member) Mandatory grants 1,282 387 1,143 60

ArandaTextileMills(PTY)Ltd Frans Barnard (Authority Member) DiscretionaryGrants 4,064 - 513 6

ArandaTextileMills(PTY)Ltd Frans Barnard (Authority Member) Mandatory grants 66 19 18 5

ArandaLearnershipCollege(PTY)Ltd Frans Barnard (Authority Member) DiscretionaryGrants 10,156 446 6,885 -

Levies

42,007 5,729

ZenzeleniClothing(PTY)Ltd Andre Kriel (Authority Member) Levies 117 - 89 -

CaxtonAssociates Daphne Erasmus (Authority Member) Levies 1,475 - 929 -

CTP Limited Daphne Erasmus (Authority Member) Levies 4,604 - 4,456 -

ArandaTextileMills(PTY)Ltd Frans Barnard (Authority Member) Levies 265 - 247 -

ArandaLearnershipCollege(PTY)Ltd Frans Barnard (Authority Member) Levies - - 8 -

PearsonHoldingsSA(PTY)LtdBrian Wafawarowa (Authority Member) Levies 1,067 - - -

Sappi SA Ltd MikeTruelock(AuthorityMember) Levies 34,479 - - -

Theabovetransactionsoccurredundertermsthatwerenolessfavourablethanthoseavailableinsimilararm’slengthdealings.


103

24.3 Key management salaries

EmployeesBasic salary

(R’000)Allowances

(R’000)

Company Contributions

(R’000)Bonus

(R’000)Back Pay

(R’000)Leave Pay

(R’000)Other

(R’000)

Total Cost toCompany

(R’000)

ChiefExecutiveOfficer 1,521 306 21 54 (9) - - 1,893

ChiefFinancialOfficer 591 57 9 16 - 56 - 729

ExecutiveManager: Governance,Compliance,Risk, Legal 795 82 11 - - - - 888

ExecutiveManager:Projects 375 33 5 - - - - 413

ExecutiveManager: Research,Planning and Reporting 756 122 11 4 - - - 892

ExecutiveManager:QualityAssurance 322 28 5 - - - - 355

ChiefExecutive:Strategy and CorporateAffairs 267 6 3 - - - 378 654

TOTAL 4,627 634 64 74 (9) 56 378 5,824

Notes:i) Allowances-includeallowancesfortravel,socialbenefitsandcellphone. ii) CompanyContributions-socialbenefits(i.e.medicalaid,provident/pensionfund,disabilitycoverandfuneralcover)werepaiddirectlyto

employeesasallowanceswhiletheSETAwasintheprocessofappointingSocialBenefitsAdministrators.iii) TheCFO,MrsGinaLayzell,resignedon31/12/2014.TheFinanceManager,AvinashGangoo,actedinthepositionduringJanuary2015and

thenewactingCFO,MrSithembisoNgwenya,wasappointedon02/02/2015onafixedtermcontract.iv) TheExecutiveManager:ProjectscommencedservicewiththeFP&MSETAon1/09/2014.v) TheExecutiveManager:QualityAssurancecommencedservicewiththeFP&MSETAon1/10/2014.vi) TheChiefExecutive:StrategyandCorporateAffairs’employmentwasterminatedon31/07/2014.

24.4 Board and Audit Committee Remuneration

Board Members Remuneration(R’000)

Expenses(R’000)

Total(R’000)

S Ngidi 232 6 238

M odayan 52 - 52

DFredericks - 8 8

T Boltman 31 - 31

315 14 329

Audit Committee Members Remuneration(R’000)

Expenses(R’000)

Total(R’000)

Mr T Boltman 7 1 8

Mr S Ngwenya 7 - 7

Ms K De Villiers 17 2 19

31 3 34

Note:MrSithembisoNgwenyaresignedfromtheAuditCommitteeon31/01/2015

104

25. PRIOR YEAR ERROR

2013/14

Intheprioryear,partoftheDiscretionaryGrantswereunderstated.EffectStatementofFinancialPerformance 515StatementofFinancialPosition -DiscretionaryAccruals 515DiscretionaryExpenses (515)Discretionary payments for the previous year were paid in the current year which went against the Reserves.

Intheprioryear,AdministrationAccrualswereincorrectlystated.EffectStatementofFinancialPerformanceAdministrationExpenses (4)StatementofFinancialPosition -AdministrationAccruals 4DiscretionaryReserves (4)Administration payments for the previous year were paid in the current year which went against the Reserves.

Intheprioryear,partoftheDiscretionaryGrantswereunderstated.EffectStatementofFinancialPerformance 400StatementofFinancialPosition -DiscretionaryAccruals -DiscretionaryReserves (400)Debtor for PASA was incorrectly raised on the prior year.


24.5 Transactions with other Government Departments within National Sphere

2014/15 R’000

2013/14 R’000

Related Party Transaction TypeAmount of the

TransactionAmount of the

Transaction

Payables 554 1,049

EthekwiniMunicipality Supplyelectricity 58 208

Telkom Telephone usage 496 841

Total 554 1,049

105

26. BUDGET VERSUS ACTUAL FIGURES

TheAnnualFinancialStatementsandthebudgetwerepreparedonthesamebasisofaccounting.Thisismadepubliclyavailable.AllchangesmadebetweentheapprovedbudgetandthefinalbudgetwereapprovedbytheAccountingAuthorityandwereduetounforeseencircumstancesduring the year.

FP&MSETAbudgetcomparisonwithactualfigures.

Statement of Financial Performance

2014/15R’000 Note Actual

Approved Budget

Approved Reallocations Final Budget Variance

Skills Development Levies 1 315,742 318,835 - 318,835 (3,093)

AdministrationIncome 41,390 41,847 - 41,847 (457)

MandatoryGrantIncome 86,348 79,709 - 79,709 6,639

DiscretionaryGrantIncome 188,004 197,279 - 197,279 (9,275)

PenaltiesandInterest 7,814 3,232 - 3,232 4,582

InvestmentIncome 33,298 17,500 - 17,500 15,798

TLS - UIF 83 - - - 83

TLS - W&R SETA 39 - - - 39

TLS - DHET 5 - - - 5

government grants and Donor Funding receivedinadvance 4,989 - - 4,989

other revenue 178 - - - 178

Total 362,148 339,567 - 339,567 22,581

Mandatory grant Expenses 2 (84,480) (57,720) - (57,720) (26,760)

Pivotal grants - (127,560) - (127,560) 127,560

DiscretionaryExpenses (313,029) (31,890) - (31,890) (281,139)

Discretionary/ProjectAdministrationExpenses - (12,928) - (12,928) 12,928

government grants and Donor Funding receivedinadvance (4,989) - - - (4,989)

TLS - UIF (83) - - - (83)

TLS - W&R SETA (39) - - - (39)

TLS - DHET (5) - - - (5)

Administration Expenses 6 (38,235) (39,516) - (39,516) 1,281

AccommodationandMeals (123) (171) - (171) 48

AccountingAuthorityFees (329) (421) - (421) 92

Airfares and Travel Costs (1,105) (1,248) - (1,248) 143

StaffTravel-Reimbursement (42) (119) - (119) 77

Amortisation (173) (162) (10) (172) (1)

AuditCommittee (34) (77) - (77) 43

Audit Fees (1,617) (1,948) - (1,948) 331

Bad Debts 57 (42) - (42) 99

Bank Charges (38) (43) - (43) 5

CateringandRefreshments-FunctionsandMeetings (57) (114) - (114) 57

Cleaning (89) (81) - (81) (8)

106


Approved Budget


Advertising (141) (144) - (144) 3

ConsultancyandServiceProviderFees (610) (588) - (588) (22)

ConsultancyandServiceProviderFees-ProjectClean-up (583) (600) - (600) (17)

Courier and Postage (86) (64) - (64) (22)

Depreciation (1,785) (1,844) 10 (1,834) 49

ElectricityandWater (889) (895) - (895) 6

Equipment Rental - (8) 8 - -

ETQAExp-AccommodationandAirfares (180) (162) (20) (182) 2

ETQAExp-Printing (15) (41) - (41) 26

ETQAExp-FunctionsandMeetings (3) (44) - (44) 41

ETQAExp-Travel - (56) 44 (12) 12

ETQAMotorExpenses (38) (20) (24) (44) 6

FinanceCommittee (1) (5) - (5) 4

HR&RemunerationCommittee (4) (5) - (5) 1

Insurance (262) (316) - (316) 54

Internal Audit (1,174) (660) (580) (1,240) 66

Leasing Charges - Equipment - (20) 20 - -

Legal Fees (25) (83) (117) (200) 175

Loss on Disposal of Property, Plant and Equipment (82) (151) 53 (98) 16

MotorVehicleHire (140) (145) - (145) 5

Vehicle-FuelandLubrication (24) (21) - (21) (3)

Vehicle-Licences - (1) - (1) 1

Vehicle-Maintenance (9) (15) - (15) 6

OfficeExpenses (133) (208) - (208) 75

ForensicAudit 8 (227) (165) (63) (228) 1

PrintingandPublications (290) (258) (14) (272) (18)

Professional Indemnity - (96) - (96) 96

Rent Paid (3,528) (3,709) (28) (3,737) 209

RepairsandMaintenanceofBuilding,OfficeEquipment&Computers (34) (35) - (35) 1

Computer Expenses (61) (65) - (65) 4

SalariesandStaffRelatedCosts (19,823) (19,650) 721 (18,929) (894)

SecurityExpenses (29) (52) - (52) 23

StaffandBoardTraining (138) (301) - (301) 163

StaffWelfare (2) (9) - (9) 7

Stationery (57) (66) - (66) 9

SubscriptionsandMemberships (477) (504) - (504) 27

Telephone (837) (854) - (854) 17

AnnualGeneralMeeting (75) (80) - (80) 5

MIS for FP&M SETA (2,076) (2,306) - (2,306) 230

QCTO (844) (844) - (844) -

NetDeficit (78,712) 69,953 - 69,953 (148,665)


107

Statement of Financial Position


Approved Budget


Non-current Assets -

Property, Plant and Equipment and Intangible Assets 7 2,798 2,663 - 2,663 135

Current Assets -

ReceivablesfromNon-ExchangeTransactions 2,138 15,331 - 15,331 (13,193)

ReceivablesfromExchangeTransactions 757 659 - 659 98

Inventories 159 98 - 98 61

Cash and Cash Equivalents 3 586,322 84,040 - 84,040 502,282

Total Assets 592,174 102,791 - 102,791 489,383

Funds and Reserves

AdministrationReserve 2,798 2,663 - 2,663 135

Employer grant Reserve 4 - 100 - 100 (100)

DiscretionaryReserve 477,330 72,718 - 72,718 404,612

Current Liabilities

TradeandOtherPayablesExchangeTransactions 5 5,141 2,500 - 2,500 2,641

TradeandOtherPayablesNon-ExchangeTransactions 5 90,403 14,810 - 14,810 75,593

government grants and Donor Funding ReceivedinAdvance 8,865 10,000 - 10,000 (1,135)

W&R SETAFundsReceivedinAdvance 851 - - - 851

TLSW&RSETAandUIFFundsreceived inadvance 2,265 - - - 2,265

W&RSETAFundsreceivedinadvance 525 - - - 525

DHETFundsreceivedinadvance 3,996 - - - 3,996

Total Equity and Liabilities 592,174 102,791 - 102,791 489,383

108

Note1 Totalleviesreceivedwasunderbudgetby1%.Note2 Apayoutratioof72%wasbudgetedfor.TheactualpayoutratioforFP&MSETAwas72%.Thisaccountsforthevarianceinactualand

budgeted amounts.Note3 Discretionary spending did increase in the current financial year but not to an extent that matched budgeted cash and cash

equivalent movements.Note4 EmployerGrantReserveswerelessthanwhatwasbudgetedforascompaniesregisteredwithFP&MSETAinthelast6monthsofthe

financialyeardidnotsubmitmandatorygrantapplications.Note5 ThevarianceinTradeandOtherPayablesNon–ExchangeTransactionsisduetotheprovisionforthemandatoryanddiscretionarygrant

accrualsandlevycreditorsasatyearend.Note6 The total administrative expenditure amounted to R38.2million. Actual administration expenditure was within the 10.5%

administrationthreshold.Note7 Varianceduetoincreaseinassetspurchased.Note8 Forensiccostsincludedcostsincurredforfraudinvestigations.

27. COMMITMENTS

OfthebalanceofR477millionavailableintheDiscretionaryReservesattheendofMarch2015,R452millionhasbeenapprovedandcontractuallycommitted.Amountsforexpensesthathavealreadybeencontractedor incurredandtherefore included ingrantexpenses intheStatementof Financial Performance, are also indicated. A request for the accumulation of these funds has been submitted to National Treasury on 31ofMay2015.AtthetimeofcompilingtheAnnualFinancialStatements,noreplyhadbeenreceived.

2013/14

Intervention

Commitment Balance as

per Register (2012/2013)

(R’000)

Amount Contracted

(2013/2014)(R’000)

Disbursements pre 1 April 2013

(R’000)

Contract Payments

(2013/2014)(R’000)

Adjustment as result of

Cancellation of Contracts

(R’000)

Closing Balance(R’000)

AdultEducationandTraining (AET) 5,270 2,973 (2,000) (1,313) - 4,930Apprenticeship18.1 22,079 32,445 (592) (2,714) - 51,218Apprenticeship18.2 41,605 12,985 (358) (3,792) - 50,440ApprenticeshipRPL 140 265 (5) - - 400Bursaries graduate 28,917 17,303 (2,472) (7,144) - 36,603TVETInfrastructureProject(2014\2015) - 29,869 - (29,869) - -Learnership 18.1 25,227 37,115 (4,329) (9,597) - 48,417Learnership 18.2 66,259 26,650 (15,260) (25,081) - 52,568NSFASIntervention-Bursaries - 23,108 - - - 23,108Skills Programme 18.1 7,912 10,701 (1,345) (1,656) - 15,612Skills Programme 18.2 6,497 2,585 (1,467) (1,544) - 6,071Skills Programme RPL 196 1,065 (1) (177) - 1,084SpecialProjects 17,100 2,000 (5,016) (2,958) - 11,126SpecialProjectsDisability 7,439 2,707 (935) (3,651) - 5,560SpecialProjectsRural Development 28,848 13,290 (3,504) (13,250) - 25,384SpecialProjectsSectoralPriorities 13,510 40,536 (1,174) (7,295) - 45,577SpecialProjects-QCTO 2,200 51,300 - - - 53,500WIL (12 months) - 15,350 - - - 15,350WorkExperience/Internship 3,103 8,655 (157) (754) - 10,847FIETA(EXSETA) 938 - - - - 938MAPPP-SETA(EXSETA) 29,642 - - - - 29,642CTFLSETA(EXSETA) 8,906 - - - - 8,906

315,787 330,901 (38,614) (110,795) - 497,280


109

2014/15

Intervention

Opening Balance

Commitments(R’000)

Amount Contracted

(2014/2015)(R’000)

Disbursements (2014/2015)

(R’000)

Adjustment as result of

Sweeping of Funds

(R’000)

Adjustment resulting from

Cancellation of Contracts

(R’000)

Closing Balance as per

Commitment Register(R’000)

AET 4,930 2,073 (2,461) (102) (417) 4,022

Apprenticeship18.1 51,218 16,025 (7,102) (1,490) (2,335) 56,316

Apprenticeship18.2 50,440 31,911 (13,284) (105) (5,030) 63,933

ApprenticeshipRPL 400 125 (73) (15) (100) 338

Bursaries graduate 36,603 17,880 (11,322) (1,470) (1,085) 40,606

Bursaries Post graduate - 500 (440) - (50) 10

TVETInfrastructureProject(2014\2015) - 30,619 (30,619) - - -

Learnership 18.1 48,417 13,005 (28,039) (714) (1,520) 31,149

Learnership 18.2 52,568 33,525 (31,510) (1,520) (3,125) 49,938

NSFASIntervention-Bursaries 23,108 - (23,099) - - 9

Skills Programme 18.1 15,612 6,458 (5,084) (530) (1,022) 15,434

Skills Programme 18.2 6,071 3,672 (3,638) (187) (1,562) 4,355

Skills Programme RPL 1,084 3,432 (982) - - 3,533

SpecialProjects 11,126 36,816 (18,094) (1,026) (260) 28,562

SpecialProjectsDisability 5,560 2,623 (5,524) (5) - 2,654

SpecialProjectsRural Development 25,384 10,631 (16,298) (144) (966) 18,608

SpecialProjectsSectoralPriorities 45,577 30,595 (39,507) - (865) 35,799

SpecialProjects-QCTO 53,500 - - - - 53,500

TVET - 5,522 (500) - - 5,022

WIL (12 months) 15,350 11,692 (16,664) - - 10,378

WIL (6 Months) - 1,170 (150) - - 1,020

WorkExperience/Internship 10,847 7,011 (7,151) (230) (510) 9,968

FIETA(EXSETA) 938 - - (938) - -

MAPPP-SETA(EXSETA) 29,642 - (3,642) (13,129) - 12,871

CTFLSETA(EXSETA) 8,906 - (218) (5,036) - 3,651

497,280 265,285 (265,400) (26,641) (18,848) 451,676

Thebalanceofthecommitmentsasat31March2015isR451,676,000.ThebalanceofthecommitmentswillbefundedfromtheDiscretionarygrant Reserves.

IncludedinthecommitmentbalanceisanoverpaymentofR345,200paidtostakeholders.

Split between PIVOTAL and Non-PIVOTAL Projects TheDiscretionaryGrantregulationsrequirethatatleast80%ofthediscretionarybudgetbeallocatedtoPIVOTALprojects.Duetotheexpenditureinthecurrentfinancialyear,includingexpensesforprojects,thatcommencedbeforethisregulationbecameeffective,managementhasbasedtheircalculationofthesplitbetweenPIVOTAL/non-PIVOTALprojectsontheallocationofprojectsinthe2014/2015financialyear.In2014/2015,FP&MSETAhadallocated90%ofprojectstoPIVOTALand10%tonon-PIVOTALprojects.

28. GOING CONCERN

Theabilityoftheentitytocontinueasagoingconcernisdependentonanumberoffactors.ThemostsignificantoftheseisthattheMinisterofHigherEducationandTrainingissuesaSETAlicense.TheMinisterisyettopronouncethelicensingoftheSETAsbeyond31March2016.InhisbudgetspeechtheMinisterindicatedthathestillhastoapproachParliamenttore-licencetheSETAsandthiswillhappeninthe2015/16 financialyear.

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noteS

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