department of labour presentation to the select committee october 2007

DEPARTMENT OF LABOUR

PRESENTATION TO THE SELECT COMMITTEE

OCTOBER 2007

2

Structure of Presentation 1. Key issues per Main Division

1.1 Service Delivery 1.2 Employment and Skills Development Services/Human Resource Development ( ESDS / HRD)1.3 Labour Policy and Labour Market Programmes (LP & LMP)1.4 Administration

2. 2006/07 Expenditure Information

3. Auditor-General Report

1. KEY ISSUES PER MAIN DIVISION

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1.1 Service Delivery• 88% UIF claims processed and paid within six

weeks of receiving complete documentation.• 35% of Compensation Fund claims processed

and paid within 90 days of receiving complete documentation.

• Phase 1 of Employment Services System (ESSA) completed and is being implemented in 2007/08.

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• 2 637 Projects identified for support and 2 314 (88%) supported with respect to Skills Development initiatives that support Provincial growth and development strategies.

PO No. PIP No. Supported

% Supported

MP 500 460 92

LP 33 14 42

GN 152 141 93

GS 0 0 92

FS 305 253 82

KZN 621 503 81

NC 142 79 56

WC 57 57 100

NW 140 120 90

EC 687 687 100

TOTAL 2637 2314 88

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1.1 Service Delivery

• 118 153 unemployed trained and 90 691 (77%) placed with 36% receiving accredited training.

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PO No. Trained

No. Placed

% Placed

% Accredit

edMP 11336 10525 93 0LP 18001 17446 97 13GN 5044 2932 77 28GS 9965 6649 63 26FS 6611 5302 77 26

KZN 19313 4522 14 50NC 6801 5477 78 0WC 5450 3938 78 0NW 15020 14518 99 0EC 20610 19384 98 34

Total 118153 90691 77 36

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• 2 294 retrenchees were registered, 696 counselled and 642 referred for training.

PO No Retrenchmen

ts

No counselling

No training

MP 0 0 0LP 0 0 0GN 0 0 0GS 37 37 37FS 265 265 216

KZN 1347 0 0NC 0 0 0WC 0 0 0NW 389 389 389EC 256 5 0

Total 2294 696 642

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•3 826 youth were trained and 1 462 were placed in sustainable employment.

PO Total Trained Total placedMP 0 0LP 0 0GN 0 0GS 934 709FS 499 446

KZN 161 90NC 12 12WC 1371 0NW 205 205EC 644 0

Total 3826 1462

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• Out of 180 767 workplaces inspected, 136 845 (76%) complied.

PO Inspected Compiled %MP 15526 11323 72LP 10548 8188 77GN 13955 8294 59GS 56721 41409 73FS 15388 12482 81

KZN 28027 23420 83NC 7797 6697 85WC 1282 679 52NW 10204 6149 60EC 21319 18204 85

Total 180767 136845 76

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• 97% labour related complaints settled within 90

days.

PO Received Settled %MP 2600 23404 90LP 32244 30335 94GN 36224 31333 86GS 10289 7466 73FS 5522 4664 84

KZN 24933 19361 78NC 2338 1131 48WC 3494 2225 63NW 3340 3096 93EC 12192 6062 50

Total 129836 125981 97

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• 5 692 workplaces in high risk industries inspected on OHS. 23% decrease of reported incidences.

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PO NumbersMpumalanga 269

Limpopo 359Gauteng North 639Gauteng South 0

Free State 3788KwaZulu Natal 0Northern Cape 528Western Cape 59

North West 50Eastern Cape 0

Total 5692

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• The draft OHS Policy and Bill have been finalised in consultation with OHS Advisory Council comprising of social partners.

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1.2 ESDS/ HRD

Total funds available R2.2 billion• Expenditure: R714 381 million• Commitments: R1 067 874• % Spent against total budget – 81%

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Name of

Provider

Approved

Budget

# Learn

ers

Disbursed

EC LP KZN FS MP NW NC GTG WC TOTAL

Gert Sibande & Nkangala FET Colleges

R 10,457,276

R 2.000 R 3,280,000

2,000

2,000

Project Literacy

R 32,928,000

5,600 R 12,654,000

2,000 1,200 1,200 1,200 5,600

Unisa Abet Institute

R 36,621,078

7,800 R 12,660,000

1,500 3,300 1,200 1,800 7,800

Siyaphambili Audit Education Services CC

R 9,266,400

1,800 R 2,786,000

1,800 1,800

• R37.8 million paid to 7 providers to train 20 000 unemployed ABET learners.

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Name of Provider

Approved Budget

# Learn

ers

Disbursed


Botshabelo Guidance Centre

R 4,704,000 800 R 1,731,00 800 800

Better Best Educational Projects

R 6,186,700 1,300 R 3,143,000

1,300 1,300

R 103,723,275

20,100 R 37,811,000

3,300 3,300 3,300 2,000 2,000 1,800 1,200 1,200 1,200 20,100

•R37.8 million paid to 7 providers to train 20 000 unemployed ABET learners.

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1.2 ESDS/ HRD

• R10 million budgeted for the printing of guide and training of career guidance counsellors. Training targeted to commence during 2007.

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R316 million in grants approved to benefit 10 900 learners on learnerships, apprenticeships and internships.

Name of SETA

Total budget

No Learners


BANKSETA R 24,310,549 824 50 55 70 51 50 50 53 395 50 824

CHIETA R 44,754,329 1,236 246 - 250 500 240 - - - - 1,236

CETA EPWP R 53,792,690 1,000 180 70 50 50 50 50 50 310 190 1,000

ESETA R 17,000,000 550 100 50 100 80 - 80 60 80 - 550

FIETA R 22,615,960 360 40 20 150 - 50 - - 50 50 360

FASSET R 30,675,384 376 80 15 - 81 90 30 80 - - 376

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Name of SETA

Total budget

No Learners


FOODBEV R 23,126,800

800 50 50 70 50 50 - - 120 149 539

INSETA R 13,475,000

539 200 50 150 50 50 - - 100 200 800

MQA R 15,288,153

133 - 30 - 30 33 40 - - - 133

MAPPPP R 20,783,274

981 75 90 140 150 90 116 100 120 100 981

SASSETA R 14,156,000

2,350 230 210 320 220 220 230 200 450 270 2,350

SERVICES R 19,050,000

1,000 300 - 300 100 100 - - 100 100 1,1000

THETA R 17,784,000

780 70 60 130 50 170 50 30 150 70 780

TOTAL SETAs

R 316,812,139

10,929 1,621 700 1,730 1,412 1,193 646 573 1,875 1,179 10,929

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•1 148 undergraduate and 1 042 post graduate students received bursaries totalling R 78.5 million

UNDERGRADUATE BURSARIES

Provinces GP FS NW NC WC EC MP LP KZN

INSTITUTIONS

Cape Peninsula Uni. Of Technology - Belville 29

Cape Peninsula Uni. Of Technology - CT 17

Cape Town University 10

Central University of Technology 14

Durban University of Technology 39

Fort Hare University 5

Free State University 68

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JHB University 36

KZN University 72

Limpopo University ( Medunsa) 2

Mangosuthu Technikon 23

Nelson Mandela Metropolitan University 21

NW University 23

Pretoria University 50

Rhodes University 11

UNISA 211

Stellenbosch University 8

Tshwane University of Technology 91

University of Limpopo 87

Vaal University of Technology 11

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Venda University 179

Walter Sisulu University - Berlin 6

Walter Sisulu University - Butterworth 18

Walter Sisulu University - Mthatha 40

WC University 27

Wits University 27

Zululand University 23

Total 440 68 23 0 83 109 0 268 157

GRAND TOTAL 1148

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POST GRADUATE

Level of Study Male Female Disabled Total

Honours 203 193 34 430

Masters 154 162 48 364

Doctoral 94 122 25 241

Post-doctoral 5 2 0 7

TOTAL 456 479 107 1042

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1.2 ESDS/HRD• All 23 SETAs signed SLAs by 31 July 2006. 20

SETAs have performed satisfactory against set targets.

• 98 588 employed and unemployed learners trained in programmes linked to scarce skillsof which 33 674 completed.

• 3 287 youth trained in new venture creation learnership.

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• Strategic projects to the value of R886 million initiated to support 9 provinces over the next 3 years.

PROVINCE BUDGET LEARNERS

Eastern Cape R 99,997,200 2,696

Free State R 96,390,000 1,865

Gauteng R 99,999,110 8,693

KwaZulu Natal R 97,548,000 17,520

Limpopo R 95,622,000 2,109

Mpumalanga R 99,312,000 1,664

Northern Cape R 99,972,000 1,694

North West R 98,010,000 2,335

Western Cape R 99,900,000 2,560

TOTAL R 886,750,310 R 41,136

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WC GPG KZN LIMP MP NW NC FC EC Total

PROGRAMME TYPE

Learnerships 1500 1000 580 1909 800 1500 500 1440 2326 11555

Internships 100 254 175 325 854

Apprenticeships 400 2250 240 0 200 235 330 250 45 3950

Bursaries 450 0 200 264 100 1014

Skills Programme 210 5443 16700 400 500 510 23763

TOTALS 2,560 8,693 17,520

2,109 1,664 2,335 1,694 1,865 2,696 41,136

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1.2 ESDS/HRD

• Indlela arranged 9 387 assessments ,96 withdrawn,1 482 absent,7 905 tested, 3 192 passed (40%). Assessments were conducted between two and six months.

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1.3 LP&LMP

• Research sample to inform welfare sectoral determination expanded and timeframes for the project extended into 2007/08 financial year.

• Sectoral Determinations published for Hospitality, Contract Cleaning and Civil Engineering.

• Private Security minimum wages published.• An awareness raising strategy on elimination of

child labour was conducted in all provinces.

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1.3 LP & LMP• Child labour activities are included in the

provincial structure (IES).• All staff trained on the CLPA.• Pilot programmes implemented to address

worst forms of child labour including commercial sexual exploitation, child trafficking and children used by adults to commit crime.

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1.3 LP & LMP

• Newly published Labour Market Information captured and analysed.

• Reports produced – Industrial Action, Employment/Unemployment trends, Labour Market Review, State of Skills, Client Satisfaction Survey.

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1.3 LP & LMP• Research, Monitoring and Evaluation agenda

implemented and partnership entered into with HSRC.

• Participation in ILO Conference and Governing Body ensured. Minister appointed as Chairperson of ILO Governing Body for a year.

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1.3 LP & LMP

• All payments to NEDLAC effected. • 2 GDS progress reports compiled. A

consolidated report was presented to the PC: Labour on 29/08/2006. Another report was prepared for the next Presidential Working Group meeting.

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1.3 LP & LMP

• SEF turnaround strategy approved by the Minister and implemented.

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1.4 Administration:Communication

• The Communication Strategy for 2006/07 was developed and implemented. Strategic partnerships were entered into to enhance the DoL’s communication.

• Training programmes for Provincial Communicators were undertaken with the Institute for Advancement of Journalism. All Provincial Communicators completed courses in Basic Reporting and Feature writing.

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HRM• The Department’s HRM facilitates the

development of staff, ensures effective and efficient utilisation of the human capital and renders legal services to DoL.

• The Integrated Policy on Gender, Disability and Youth as well as the Information Technology Policies were developed.

• A total of 3 352 officials were trained as per identified training needs.

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HRM

• Employment Equity has been implemented as one of the Department’s key strategic areas.

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Information Technology• Siyaya, the claims management system used by

the UIF was enhanced, based on additional and revised business requirements.

• An on-line EE system was introduced in 2006 in line with the EE Regulations and the business strategy.

• More than 700 additional personal computers were commissioned to the ICT environment.

• Service delivery at remote sites was enabled by providing IT services to 20 mobile labour centres.

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Financial Management• A management tool to prepare performance

targets and calculate activity based budgets has been developed.

• A revised monthly and quarterly reporting system for performance and budget management has been developed in line with Treasury requirements. This system will assist the DoL to account for both performance and expenditure in an integrated way based on National Treasury requirements.

2. 2006/07 EXPENDITURE INFORMATION

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BRANCHFinal

AppropriationActual

Expenditure Variance2006/2007 2006/2007 2006/2007

R'000 R'000 R'000ADMINISTRATION 336,263 324,270 11,993 SERVICE DELIVERY 595,437 594,627 810 EMPLOYMENT & SKILLS DEVELOPMENT SERVICES 153,521 139,019 14,502 LABOUR POLICY & LABOUR MARKET PROGRAMMES 398,773 388,596 10,177 SOCIAL INSURANCE 9,501 7,028 2,473

SUB-TOTAL 1,493,495 1,453,540 39,955

SECTORAL EDUCATION AND TRAINING AUTHORITIES 4,262,741 4,262,741 - NATIONAL SKILLS FUND 1,065,686 1,065,686 -

SUB-TOTAL 5,328,427 5,328,427 -

TOTAL 6,821,922 6,781,967 39,955

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0

100,000

200,000

300,000

400,000

500,000

600,000

Admin. Serv. Del. E&SDS LP&LMP Soc. Ins.

EXP Variance

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GFS CLASSIFICATIONFinal

Appropriation Actual Expenditure Variance2006/2007 2006/2007 2006/2006

R'000 R'000 R'000COMPENSATION OF EMPLOYEES 486,511 477,064 9,447 GOODS AND SERVICES 560,314 538,087 22,227 FINANCIAL TRANSACTION IN ASSETS AND LIABILITIES 874 874 - TRANSFERS AND SUBSIDIES 417,125 410,366 6,759 PAYMENTS FOR CAPITAL ASSETS 28,671 27,149 1,522 SUB-TOTAL 1,493,495 1,453,540 39,955

STATUTORY AMOUNTS 5,328,427 5,328,427 -

TOTAL 6,821,922 6,781,967 39,955

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0

100,000

200,000

300,000

400,000

500,000

600,000

Comp. ofEmpl.

Goods &Services

Trans. &Subs

Cap. Assets

EXP Variance

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GFS CLASSIFICATIONFinal

AppropriationActual

ExpenditureVariance

2006/2007 2006/2007 2006/2007R'000 R'000 R'000

TRANSFERS AND SUBSIDIESProvinces and municipalities 606 284 322 Departmental Agencies and accounts 354,948 348,595 6,353 National Skills Fund 42,666 42,666 - National Productivity Insitute 32,028 32,028 - National Qualifications Framework 3,880 - 3,880 CCMA 244,714 244,714 - DITSELA 9,447 9,447 - NEDLAC 12,712 12,712 - UIF 1 - 1 CC 9,500 7,028 2,472

Foreign governments and international organisations 6,900 6,882 18 ILO 6,410 6,409 1 ARLAC 490 473 17

Non-profit insitutions 52,723 52,658 65 Subsidised Workshop for the Blind 6,707 6,707 - Subsidised Work-Centres for the Disabled 45,460 45,460 - SA National Council for the Blind 226 226 - DEAFSA 148 84 64 National Council for the Physically Disabled 182 181 1 SA Youth Council - - - Households 1,948 1,947 1 TOTAL 417,125 410,366 6,759

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AUDITOR GENERAL REPORT 2006/07

1. Department of Labour

2. Sheltered Employment Factories

3. National Skills Fund.

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1. DEPARTMENT OF LABOUR

Qualification : Asset managementCorrective Measures• An Interim asset management unit to be

implemented.• Department to ensure that the asset register is

accurate and complete and supports the fixed assets indicated in the Financial Statements.

• Asset register to be reconciled with the balance reflected on LOGIS.

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Emphasis of matter-DOL

Administration of Leave records:Corrective Measures• Leave registers have been introduced to ensure that

all managers exercise control over the management of leave

• Management of leave has been included as one of the key performance areas as reflected in each manager’s core management criteria and the general assessment factors which are part of the individual performance management system. This is to ensure that all managers are assessed on their management of leave

• Further to this a process has been put in motion to develop guidelines based on the Leave Policy

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MATTERS HIGHLIGHTED

• As disclosed in note 13 to the financial statements for receivables, there are staff debtors amounting to R10,2 million that is older than three years. The Department is in the process of addressing the matter and will continue with its recovery actions to the extent that the cost of doing so will not exceed the benefits thereof.

Corrective Measures:

• As stated in the audit report, the department is in the process with its recovery actions to the extent that the cost of doing so will not exceed the benefits thereof. The department is also writing –off the debts in accordance with its Debt Management Policy.

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OTHER MATTERSMonitoring of controls : Employee

Cost

Lack of monitoring over the Salary Persal EBT control account

Corrective measures:• The Department takes note of the recommendation and

action will be taken to improve the clearing of this account for the 2007/08 financial year. However, this account does not need a zero balance for moth and year-end as indicated by BAS notice number 2 of 2007. The indicator report only indicated that it is preferable to have a zero balance at year end.

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VALUE FOR MONEY MATTERS

The following non-compliance with the National Environmental Management Act, 1998 (Act No. 107 of 1998) was noted:– Section 11(2) requires the department to prepare an environmental

management plan within one year of the promulgation of this act and at least every four years thereafter. The environmental management plan was not approved.

– Section 16(1) requires the department to report annually within four months of the end of its financial year on the implementation of its adopted environmental management plan or environmental implementation plan. The last report was compiled in July 2002.

Corrective measures:

– An environmental plan is currently in a draft phase, upon approval the plan will

be submitted to the office of the Auditor General and be implemented.

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INTERNAL AUDIT The AG could not place reliance as planned on the work of internal audit as the planning process and conclusions on audit work performed by internal audit was not sufficiently documented as required by the International Internal Auditing standards.

Corrective measures:– A project team has been established to review

progress made with the establishment of the Risk Management Unit, annual risk assessments be performed, follow up responses on audit reports issued, the review of the Internal Audit structure and use of IT software.

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2. Sheltered Employment Factories

Qualification: Supply Chain Management Process not followed:

Corrective measures: • It is impractical to tender for the supply of the two main raw

materials used – i.e. SABS approved textiles and wood - since there are limited suppliers (3 for textiles and 4 for Saligna wood. Competitive quotes are always obtained for all purchases and the most favourable quote is selected based on price, quality and delivery to meet tight customer deadlines. Immediate actions include:

1. Advertise in major newspapers for alternative suppliers. There is a funding constraint in achieving this .

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Impairment of fixed assets exercise not completed at year end:

Corrective measures:• 60% completed by year end 06/07. The

remaining 5 factories will be completed. Policy is in place to reconcile fixed assets on a quarterly basis.

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Stock in transit- non disclosure at year end :

Corrective measures:• SEF Management has in place monitoring controls

regarding business activities of the SEF. All information relating to goods “Dispatched not invoiced” has been submitted to the auditors.

• A full record of goods in transit is maintained and

continuously reconciled with delivery notes.

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OTHER MATTERSRisk assessment

Corrective measures– Appropriate senior staff to be engaged to

perform this function.Material corrections made to the financial statements submitted for audit.

CORRECTIVE MEASURES:– Annual Financial Statements were amended to take

into account obsolete stock to be written off, depreciation of assets and disclosures of financial leases

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NON COMPLIANCE WITH APPLICABLE LEGISLATION:

Supply proceduresCorrective measures:

– Advertise in major newspapers for alternative suppliers – Sept 07.

Preparation of strategic plan Corrective measures: • Formal policy to be established.

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Internal control procedures for payment progressing:

Corrective measures:– Preparation for payment and authorisation is

performed by separate functions and individuals.

Payments within 30 days of Invoice : Corrective measures:

– Impractical to make payments within 30 days of Invoice. Practice is to pay within 30 days of Statement. Approval to be sought from National Treasury

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Medical schemes Act: Section 20 Business of a medical scheme :

Corrective measures:– Council for Medical Schemes has agreed that the

SEF merely needed to apply for exemption in terms of the Section 8(h) of the Medical Schemes Act, 131 of 1998, until such time as an affordable alternative could be introduced in the SEF and as approved by the Department of Labour and the National Treasury.

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Public Finance Management Act: insurance contracts relating to all the assets

Corrective measures:– There are measures in place to safeguard assets

that include proper warehousing, security of premises and assets, and proactive management to monitor and control .

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MATTERS OF GOVERNANCE Strategic plan not achieved

Corrective measures: – There is an action plan and control matrix for

putting effect to the turn around strategy. Internal audit: Non reliance on work of Internal Audit

Corrective measures:• Internal Auditors have been seconded to assist SEF

management.

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3. NATIONAL SKILLS FUNDQualification:

Project Expenditure Corrective measures:• The NSF has conducted a detailed analysis of

the current procurement processes against the Audit Qualification. The NSF is in the process of drafting proposals to align the existing procurement processes with the supply chain processes and policies of the Department.

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Qualification:Completeness of commitment

Corrective measures:• An accrual based accounting system will be

implemented which will ensure that the commitments are correctly reflected on the financial statements.

• A request has been made for acquisition of an accrual accounting software package and the appointment of external resources to assist with the setting up of an accrual accounting system.

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EMPHASIS OF MATTER

BASIS OF ACCOUNTING (DEPARTURES AND DEVIATIONS)

Corrective measures:• The Department has taken note of the Auditor

General’s comments.

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OTHER MATTERS

Material corrections made to the financial statements submitted for Audit

Corrective measures:

• The Department has taken note of the Auditor General’s comments.

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MATTERS OF GOVERNANCE

OPERATIONAL MANUALS FOR FUNDING WINDOWS

Corrective measures:• All operational manuals with the exception of

the Social Development Funding Window have been approved and submitted to the Auditor-General.

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MATTERS OF GOVERNANCE

INTERNAL AUDIT

Corrective measures:• A project team has been established to review

progress made with the establishment of the Risk Management Unit, annual risk assessments be performed, follow up responses on audit reports issued, the review of the Internal Audit structure and use of IT software .

THANK YOU

department of labour presentation to the select committee october 2007

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