the catalyst for enhanced skills, economic growth and

The catalyst for enhanced skills, economic growth and employability


AnnuAl RepoRt2012/2013

Annual Report 2012/13

Vision

World-class education and training for the Chemical Sector.

Mission

The CHIETA contributes to sustainable development through facilitating the provision of skills for growth in the Chemical Sector.


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Acronyms

ABET Adult Basic Education and TrainingAIDS Acquired Immune Deficiency SyndromeAQP Assessment Quality PartnerATR Annual Training ReportATU Apprentice Training UnitBBBEE Broad-Based Black Economic

EmpowermentCEPPWAWU Chemical Energy Paper Printing Wood

Allied Workers Union.CBO Community-Based OrganisationCBC Comcast Business CommunicationsCHIETA Chemical Industries Education and Training

AuthorityCPUT Cape Peninsula University of TechnologyDG Director-GeneralDHET Department of Higher Education and

TrainingDoL Department of LabourDMU Data Management UnitDQP Development Quality PartnerDSAP Dual System Artisan ProjectDST Department of Science and TechnologyDTI Department of Trade and IndustryDTTC Decentralised Trade Test CentreDUT Durban University of TechnologyEEA Employment Equity ActETDQA Education Training and Development

Quality AssuranceETQA Education and Training Quality AssuranceFET Further Education and TrainingGMET Generic Manufacturing Engineering and

TechnologyGRAP Generally Recognised Accounting PracticeHDSA Historically Disadvantaged South AfricanHET Higher Education and TrainingHIV Human Immunodeficiency VirusHRD Human Resource DevelopmentHR Human ResourcesHSRC Human Sciences Research CouncilICAS Independent Complaints Advocacy ServiceISOE Institute for Sectoral and Occupational

ExcellenceLMIP Local Maximum Intensity ProjectionLP&QA Learning Programmes and Quality

Assurance MoA Memorandum of Agreement

MoU Memorandum of UnderstandingMUT Mangosuthu University of TechnologyNAMB National Artisan Moderating BodyNCV National Certificate VocationalNGO Non-Governmental OrganisationNQF National Qualification FrameworkNLPES National Legislative Programme Evaluation

SocietyNMMU Nelson Mandela Metropolitan UniversityNSDS National Skills-Development StrategyNSF National Skills FundOFO Organising Framework for OccupationsOGCM Ocean General Circulation ModelP1 Practical 1P2 Practical 2PIVOTOL Professional Vocation, Occupational,

Technical and Academic LearningPSDF Provincial Skills-Development ForumPFMA Public Finance Management ActQALA Quality Assurance of Learner AchievementsQCTO Quality Council for Trades and OccupationsRSA Regional Skills AdvisorRSF Regional Skills ForumRPL Recognition of Prior LearningSACWU South African Chemical Workers UnionSAGDA South African Graduates Development

AssociationSAOGA South African Oil and Gas AllianceSAPC South African Pharmacy CouncilSAPIA South African Petroleum Industry

AssociationSAQA South African Qualification AuthoritySDA Skills Development ActSDLA Skills-Development Levies ActSDC Skills-Development CommitteeSDF Skills-Development FacilitatorSEDA Small Enterprise Development AgencySETA Sector Education and Training AuthoritySLA Service-Level AgreementSME Subject Matter ExpertSMME Small, Medium and Micro EnterprisesSQMR SETA Quarterly Monitoring ReportSSP Sector Skills PlanUASA United Association of South AfricaUoT University of TechnologyWIL Workflow Intermediate Language WSP Workplace Skills PlanWSU Walter Sisulu University


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Acronyms .......................................................................................................................................................................... 2

Chairperson’s Report ..................................................................................................................................................... 4-5

Acting CEO’s Report ...................................................................................................................................................... 8-10

Research and Skills Planning ...................................................................................................................................... 12-14

Learning Programmes and Quality Assurance ............................................................................................................ 16-18◊ Education and Training Quality Assurance ◊ Apprentice Training

Grants and Strategic Projects ..................................................................................................................................... 20-32◊ Grants ◊ Strategic Projects ◊ Regions

Governance and Risk .................................................................................................................................................. 34-37

Human Resources ....................................................................................................................................................... 39-41

CHIETA Performance Report 2012/2013 .................................................................................................................... 43-60

Finance ....................................................................................................................................................................... 62-64

Report of the Audit Committee .................................................................................................................................. 65-66

Report of the Auditor-General ................................................................................................................................... 67-69

Report of the Accounting Authority ........................................................................................................................... 71-77

Annual Financial Statements for the Year ended 31 March 2013 ............................................................................ 78-110

Materiality and Significance Framework ................................................................................................................ 111-117

Contents


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Chairperson’s Report

As the Chemical Industries and Education Training Authority (CHIETA), we recognise that education and skills levels are key enablers of economic growth. Highly-skilled people are capable of creating jobs for themselves and others, while those with the appropriate skills’ sets can be absorbed into businesses when employment opportunities arise.

Understanding South Africa’s economic and labour market dynamics is a key impetus driving the CHIETA forward. We take pride in what we do, because, by facilitating skills’ development for the Chemical Industry, we are harnessing the abilities of our people and in turn, contribute to the country’s success.

To this end, during 2012/13 the Governing Board continued to provide the requisite leadership, guidance and oversight in the CHIETA’s strategic planning process. This has ensured that the training authority remains aligned to the country’s macro-economic policy and legislative frameworks, as well as the specific needs of the Chemical Sector.

Furthermore, the training authority’s nine economic sub-sectors also participated in the compilation of the CHIETA Sector Skills Plan, a crucial strategy that articulates the scarce and critical skills needs within the industry.

A testament to the CHIETA’s performance for 2012/13 is the fact that it met, and in some cases exceeded, 49 of the 50 performance targets that were agreed to with the Honourable Minister of Higher Education and Training as part of its Strategic Plan and Annual Performance Plan.

On behalf of my fellow Governing Board members, I wish to extend my congratulations to the management and staff of the training authority for achieving one of the best performance reports in the history of the organisation.

The CHIETA performance report demonstrates the success it has enjoyed in respect of learnerships, skills programmes, bursaries, artisans, FET partnerships, workplace experience, small business support, career guidance and projects in support of national priorities. These deliverables were executed with transformation, rural development, youth and a healthy balance between employed and unemployed learners as key factors.

CHIETA is fulfilling a crucial role

Nolitha FakudeChairperson


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Chairperson’s Report

During the reporting period, the Governing Board also continued to ensure that sound and effective corporate governance systems were in place and aligned to the approved CHIETA Constitution and best practice governance principles of King III and related legislation.

These efforts have been rewarded by the CHIETA once again obtaining an unqualified audit opinion. This achievement will serve to instil greater confidence among our stakeholders that the training authority is discharging its mandate in a transparent, compliant and disciplined manner.

As the Governing Board, we have high expectations that the training authority will build on the successes of the past year by creating even stronger partnerships with our stakeholders, to robustly facilitate the development and sustainability of a competent and highly-skilled workforce for the Chemical Sector.

In conclusion, I extend my sincere gratitude to the Honourable Minister of Higher Education and Training and the officials of the department, all our stakeholders and the CHIETA Governing Board for your support and guidance.

I would also like to convey a special word of appreciation to the management and staff for their hard work and commitment in delivering on the CHIETA Strategy. Your efforts are helping to raise skills’ levels in South Africa, which is a key enabler of economic growth.

nolitha FakudeChairperson


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Meet the Board

Nolitha FakudeCHAIRPERSON

Manene Samela Chemist Khumalo(Passed Away in 2012-13)

Merwe van Pletsen(Resigned during 2012-13)

Bertie Van Baalen

Jan Smit Jacqui Klaasen Brian Muir Gerhard Ceronie Mosehla Mampho

Dan Nkotsoe George Mnguni Dr Tshenge Demana Dr Mike Booth Ingrid Dimo

◊ Tshepo Naka (Appointed in 2012-13)

◊ Simon Mofokeng (Appointed in 2012-13)


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ACTING CEO’S REPORT


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Acting CEO’s Report

The 2012/13 period under review has been yet another phenomenal year at the CHIETA! Once again, with the support of our stakeholders namely organised labour, business and the Chemical Industry-related government departments, the CHIETA succeeded in delivering on its mandate. Our results for this reporting period reflect a sterling performance.The Chemical Sector as determined by skills-development legislation consists of nine sub-sectors, details of which can be found in the Research and Skills Planning Section. A substantial number of CHIETA companies operate within Gauteng (48%), followed by KZN (18%), the Western Cape (16%) and Eastern Cape (5%). A total of 75% of all levy-paying companies in the sector are classified as Micro (50%) or Small (25%). Companies in the CHIETA have a distinctly urban bias as the chemical companies are mainly located in the urban areas.

Credible Workforce Data

The financial year ending 31 March 2013 highlights include the ongoing improvement in the implementation of the CHIETA’s electronic Workplace Skills Plan (WSP)-Annual Training Report (ATR) platform, which requires the Chemical Industry companies to furnish their WSP-ATRS and plans, with credible and verifiable information of people working at the CHIETA companies. Detailed reports on the workforce at the participating companies by name, ID number, age, geographic location and job performed are mapped against an occupation and other important information that can be obtained directly from the system. The CHIETA’s first Occupational Profile Dictionary has been enabled through analyses using the new platform. Going forward, the CHIETA will be able to benchmark each worker’s actual skills with the desired skills required to perform the specific job/occupation. This will allow the CHIETA to plan for, and support the specific skills’ needs of our companies and the workforce within the Chemical Industry, This will ensure that Discretionary Grant funds are utilised to achieve maximum benefit.

The electronic WSP-ATR platform has also enabled and supported many more CHIETA companies, including the smaller ones, to submit their WSP-ATRs. Based on the 2011/12 WSP-ATR submissions, the CHIETA now has information for over 122 000 workers employed at participating companies. There has again been a significant increase in the number of WSP-ATR submissions – from 630 two years ago when the new electronic submission platform was designed – to 690 in the current reporting period. Having streamlined the process further, we are expecting as many as 710 WSP-ATRs by June 2013, that will be reported in the next financial year.

The CHIETA forges ahead

Ayesha Itzkin Acting Chief Executive Officer


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National Artisan Skills Competition

In 2012/13, the CHIETA planned and began the implementation of its first National Artisan Skills Competition for three trades namely, Instrument Mechanician, Fitting and Electrical. The competition was open to all the SETAS and apprentices who met the entry criteria. Rounds one and two were held during this reporting period. From 319 participants who qualified to participate in the competition, 60 were women training to be artisans. By February 2013, 20 women qualified in the second round to proceed to round three which will be held from 14 to 16 May 2014. The competition was modelled on a world skills competition. The Honourable Minister Dr Blade Nzimande accepted CHIETA’s invitation to present prizes to the winners at the prize-giving gala dinner held on 17 May 2013.

Funding Efficiencies

The new grant funding regulations were promulgated in December 2012. The regulations were a result of discussions over the past three years between DHET stakeholders and relevant structures, to promote greater efficiencies for real and measureable training in terms of core occupational areas that need training support within each SETA, now known as pivotal training areas. The new regulations place greater emphasis on supporting skills needs within each economic sector for professional, institutional, vocational, occupational, technical and academic learning (PIVOTAL) interventions.For the CHIETA, as well as the other SETAs, the regulations have resulted in more funding becoming available in the Discretionary Grant basket as shown in projections in the table below. Consequently, the amount of funding disbursed for the submission of the WSP-ATR has been reduced from the previous 50% to 20% of levy contributed, with the remaining 30% now going to Discretionary Grants. This has resulted in approximately 250% more funds becoming available for pivotal skills training programmes. The non-pivotal skills that require training interventions will also continue to be funded.

The CHIETA has engaged its companies in numerous workshops since February 2013 to discuss the implications of these changes and their benefits. The companies appreciate the importance of proper planning and working closely with the CHIETA to ensure that training is implemented timeously. The CHIETA’s February 2013 implementation plan took cognisance of enhancing the required support structures to assist our companies during the start-up phase of implementing the new grant regulations. One of the key implications is that thorough and up-front skills development training planned at company level is communicated to the CHIETA, and completed by companies on time. Companies have supported the objective of efficiency regarding skills training, as per the new regulations.

COMPARISON OF PROJECTED FUNDING AVAILABLE TO CHIETA COMPANIES FOR 2013-14 BASED ON – OLD AND NEW GRANT REGULATIONS

FINANCIAL RESERVE OLD GRANT REGULATIONS NEW GRANT REGULATIONSMandatory Grants 50% - R259 463 354 20% - R103 705 338Discretionary Grants 20% - R103 705 338 49.5% - R256 868 712SETA Administration Fund plus 0.5% payable to QCto 10% - R51 892 669

10% - R51 892 6690.5% - R2 594 663

totAl R415 141 353 R415 141 353

The CHIETA has achieved a track record of an average of 91% disbursement of employer grants and project expenses since its inception. This has also helped to instil confidence in our stakeholders to work within the framework of the new grant regulations. It has now become even more important for SETAs to have access to credible labour market information to support the chemical industry’s training needs, maximally. CHIETA’s collaboration with DHET and other bodies on enhancing labour market research has progressed well during this reporting period, and our electronic WSP platform has assisted in enhancing our research efforts in this regard.


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CHIetA people

The CHIETA has been able to deliver on its mandate with the assistance of its staff and the guidance and support of the Governing Board. The appointment of additional staff members from the executive level down has contributed significantly to achieving our mandate and targets for the period under review. I commend the CHIETA Governing Board and all our stakeholders for their support and for walking the road with us.

new Developments

During this reporting period, the National Artisan Moderating Body in partnership with the Department of Higher Education and Training and selected SETAs started conceptualising a new efficient and effective model for apprentice training, known as the Dual System Artisan Training Programme. Partnering with another SETA to see if this model used in Germany and Switzerland should be piloted in South Africa is under consideration. The project entails working closely with Public, Further Education and Training Colleges (FETs) and companies to develop a training model that provides for two days at the workplace, two days at college and one day to complete assignments. Curricula, in partnership with the DHET, would be developed to support the training model. Other training industry/FET partnerships are also striving to emerge.

Audit opinion

I am delighted that the CHIETA has once again for the thirteenth consecutive year received an unqualified audit opinion from the Auditor-General of South Africa (AGSA). In support of this achievement the Auditor-General also pronounced that CHIETA’s organisational performance management and reporting against pre-determined targets is reliable in all material respects, and in accordance with the identified performance management and reporting frameworks required.This will sustain and further strengthen stakeholder confidence in CHIETA’s ability to excel and perform within a transparent and accountable framework, to the ultimate benefit of the Chemical Sector and socio-economic imperatives of South Africa. Performance-based reporting is new and the AGSA and management worked hard last year when performance-based auditing was included as part of the audit by the AGSA. Therefore, in the current reporting period, the CHIETA management had already mastered this reporting process.

In conclusion, I wish to thank our staff, Governing Board and Governance Committees, our stakeholders, the DHET, the Auditor-General and our Internal Audit service provider for their contribution to another successful year at the CHIETA. I am confident that the CHIETA will continue to be a critical force in the Chemical Sector, which makes an important contribution to the country’s objectives in developing skills. This underlines the importance of the role that the CHIETA plays in partnering with the Chemical Industry and public institutions to benefit the citizens of our country, especially the youth to obtain relevant training and attain the skills required to contribute positively to the South African economy.

Ayesha ItzkinActing Chief Executive Officer



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RESEARCH AND SKIllS PlANNING


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Research and Skills Planning

CHIetA Research Framework

With the introduction of the National Skills Development Strategy (NSDS) III, greater emphasis is placed on research and analysis. Goal 1 of NSDS III specifically focuses on “Establishing a credible institutional mechanism for skills planning.” The CHIETA has developed a research framework and a research agenda and has strengthened its research function, particularly in relation to labour market research. Furthermore, CHIETA is strengthening partnerships to enhance research, delivery and impact.

The Sector Skills Plan

A big milestone in the year under review for the CHIETA was the preparation and submission of its five-year Sector Skills Plan (SSP) Update for the Chemical Sector for the period 2013 to 2018, to the Department of Higher Education and Training (DHET).

The Sector Skills Plan Update, endorsed by the CHIETA Board, was prepared in accordance with the National Skills Development Strategy (NSDS) III for the period 2011 to 2016. Feedback from DHET on previous SSP Updates was taken into account for the purposes of the SSP. In addition, the legislation, strategies and debates around skills development, including sector-specific and broader national imperatives related to the growth and development of the economy, were considered while the new Grant Regulations gazetted on 3 December 2012 were also factored into the SSP Update.

The crux of this SSP Update is to guide and inform skills-development initiatives in the Chemical Sector. The report is the result of not only a well-researched process, but also extensive stakeholder consultation, particularly via the CHIETA Chambers. The CHIETA stakeholders took ownership of this plan and are committed to working with the CHIETA in the next five years to address the skills-development priorities in the Chemical Sector, and to achieve the goals and objectives set out in the SSP. It will be revised and updated annually and aligned to government policies and growth plans as they become operational.

Critical planning puts the CHIETA on the road to success

Meryl Plasket

Executive Manager: Research and Skills Planning


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As part of its skills-development planning function, the CHIETA annually collects data from employers on occupations that they consider to be scarce skills occupations. The information on scarce skills was obtained by analysing the results set out in the Scarce-Skills Table of the WSPs-ATRs submitted for year 2011-2012, and discussed within the Chambers. Trade-related occupations constitute nearly 50% of scarce skills while professionals constitute nearly 40%. The scarce skills list was submitted to DHET by the deadline as is required annually, as well as being incorporated into the Skills Needs Section of the SSP.

Research projects for 2012/13

In addition to the secondary research undertaken as part of the SSP Update process, various research projects were undertaken.

The following research projects were completed in the 2012/2013 financial year:

◊ Strengthening Co-operatives (research and training).◊ HIV/Aids within the Chemical Sector and strategies to mitigate its impact (research and training).

The following research projects are in progress and will be completed in the next financial year:

◊ Identification of future skills needs of the Chemical Industries Sector with reference to the Green Economy.◊ Investigation of the levels of toxic chemicals in polluted industrial areas. (The project is with DUT, with 10 students

gaining practical research experience.)◊ Lifecycle approach to Integrated Waste-Management for Industrial and Chemical Packaging in South Africa.◊ Globally Harmonised System for the classification and labelling of chemicals (research and curriculum

development).

In pursuance of NSDS Goal 1: Establishing a credible institutional mechanism for skills planning and strengthening its labour market data, CHIETA undertook the following:

◊ Employer-perception sector survey mapped against NSDS III goals.◊ WSP/ATR Source Data Collection and Analysis Reports (WSP-ATR) were produced for all nine sub-sectors, as well

as a consolidated report for the Chemical Sector.◊ Occupation profiling resulting in the first CHIETA Occupational Dictionary (detailing information to the task level

and qualification), as well as submission to DHET on changes the sector proposed in updating the OFO Version 2012 to OFO Version 2013, to ensure the OFO represents the reality of occupations within the sector.

◊ Supply-side database conceptualisation and data collection.

CHIETA’s career guide will be informed by the Occupational Dictionary and the qualifications available. CHIETA will continue to support companies to improve the accuracy and quality of data for the next WSP-ATR and PIVOTAL report cycle. In addition, CHIETA plans to update the Occupational Dictionary, develop a qualification matrix against those occupations, establish and maintain the supply-side database for use by CHIETA companies, and roll-out the occupational and individual employee skills survey.


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Building Research Relationships and Partnerships

The first CHIETA Research Colloquium (the Colloquium hereafter) was held at the South West FET College in February 2012. The purpose of the Colloquium was to provide an opportunity and platform for Chemical Sector stakeholders to engage around skills-related research of relevance nationally and to the Chemical Sector specifically.

The invitees included CHIETA Board and Chambers (employer associations, trade unions, critical interest groups and government departments), CHIETA companies and stakeholders, quality councils (Quality Council for Trades and Occupations, Umalusi, and the Higher Education Quality Council), research councils such as Human Sciences Research Council (HSRC), public Higher Education and Training Institutions (HETs), Further Education and Training Colleges (FETs), government departments including the Department of Higher Education and Training (DHET), and other Sector Education and Training Authorities (SETAs).

The feedback received was very positive with requests for further engagements on issues such as green skills, consolidating partnerships, and learning programme issues. It is proposed to make the CHIETA Research Colloquium a regular event.There is great willingness from various institutions and industry to forge partnerships to support skills development. As a SETA, CHIETA is well-placed to facilitate and expand such partnerships. CHIETA engagements with various institutions on specific research and implementation areas will continue. A meeting for example, to discuss the supply-side database was held with various public FETs, UoTs and universities in March 2013.

In pursuance of the NSDS III Goal 1: Establishing a credible institutional mechanism for skills planning, the Department of Higher Education and Training (DHET) commissioned the Human Sciences Research Council (HSRC) to lead a national consortium supporting it in creating a strategic labour market intelligence system. The core research consortium consists of the HSRC, the Development Policy Research Unit at the University of Cape Town, and the Education Policy Unit at the University of the Witwatersrand. Other partners include public and private research institutes, universities and independent consultants. CHIETA has participated in the Labour Market Intelligence Programme (LMIP) forums and will continue to do so.

CHIETA has participated in various broader research events, such as the SAQA NQF Research Conference in March 2013, where CHIETA presented on two topics: CHIETA’s approach to partnerships particularly in relation to public FETs and HETs, and CHIETA’s green skills research project

Chambers

The five Chambers, made up of its nine sectors, namely: Petroleum and Base Chemicals, Fast-Moving Consumer Goods and Pharmaceuticals, Explosives and Fertilisers, Specialty Chemicals and Surface Coatings and Glass, have played a central role in skills planning in line with their constitutional mandate. Issues raised in the draft Chamber Skills Plans have been incorporated into the SSP Update. In the following year, the Chambers will develop and finalise sub-sector skills plans including flagship projects, some of which have already been launched. The CHIETA-SAPIA integrated education and training programme for the Petroleum Industry is an example of a flagship project.

The SSP Update and completed research reports are available on the CHIETA website: www.chieta.org.za



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lEARNING PROGRAMMES AND QuAlITy ASSuRANCE


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Learning Programmes and Quality Assurance

COMMITTED TO INNOVATION Stuurman Aphane

Quality Assurance Manager

SKILLING ARTISANS Tshidi Magonare

Apprenticeships Training Manager

The LP&QA Division (also known as the ETDQA Division) of the CHIETA is tasked with accrediting training providers, registering assessors and moderators, and performing quality assurance functions to ensure that credible and valid certificates are issued to competent learners on completing apprenticeships, learnerships and skills-programme training. This Division is headed by the Executive Manager Ayesha Itzkin.

As the skills-development landscape changes the Division continues to ensure that new developments are communicated and implemented at the CHIETA companies. An example is in the area of qualification design and registration. Previously, the Division was also responsible for the development of NQF qualifications through its now defunct Standards Generation Body. However, the QCTO (Quality Council for Trades and Occupations) is now the custodian of curriculum and qualifications design.

The QCTO is preparing to move full-steam ahead. As a transitory measure, the QCTO has advised all SETA-ETQAs that they need to continue to function as they did under the previous dispensation. SAQA will not register any new qualifications unless the QCTO process is followed, and the registration is recommended by the QCTO via the Development Quality Partners. The CHIETA has played the role of the DQP in collaboration with other SETAs, FET Colleges, other public institutions, and technical trades and occupations-based experts from companies to develop four new qualifications. They are Boilermaking/Fabrication, Surface Coatings, Laboratory Analyst and Welding. Two occupational qualifications were submitted to SAQA for registration. These qualifications are not SETA-specific however, there are areas of specialisation that are sector-specific. It is important for the CHIETA stakeholders to note that SAQA has registered all qualifications that are still fit-for-purpose for a further three years from 30 June 2012 to 30 June 2015, or until their teach-out period.

Designing occupationally-directed curricula and unit standards, as well the associated assessment specifications are overseen by the LP&QA Division. The QCTO has to date provided full support and guidance in this regard to the CHIETA’s development processes. The Division has two Training and Quality Assurance Units. The Apprentice Training


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lP&QA

Unit (ATU) is managed by Tshidi Magonare, who handles apprentice training and the ETQA (Education, Training, and Quality Assurance) Unit Manager, Stuurman Aphane, who concentrates on NQF- related training. Learner data and other relevant training-related data are captured by the Division staff who also issue certificates to competent learners. Both units participated and provided input in the CHIETA’s strategic planning and management of key performance areas, including reporting back to stakeholders and the relevant authorities on achievements.

The ATU supported employers offering apprenticeship training, as well as the CHIETA-accredited Decentralised Trade Testing Centres (DTTCs), and issued certificates to competent learners co-signed by the CHIETA and the Registrar. Artisan development was crucial to the achievement of the NSDS III Skills Accord of July 2011, and Government’s New Growth Path. A total of 51 providers, DTTCs and employers were supported, inspected and accredited or their scope extended, exceeding the annual target of 10 by far.

Successful Skills Competition

In 2012/13 the ATU was tasked with the implementation of the CHIETA’s inaugural Skills Competition. The final round of the competition took place in May 2013. The purpose of the competition is to increase awareness of the CHIETA’s apprenticeships, raise the standard of competency in the apprenticeship environment, and create a competitive spirit between apprentices. The competition prioritised the following trades: Electricians, Instrument Mechanicians and Fitters. The competition is modelled on the World Skills Competition to which the Chemical Sector plans to send competitors in the future.

The ATU planned and co-ordinated the first two rounds of the Skills Competition. This work was overseen and directed by the Executive Manager of the Division, Ms Ayesha Itzkin (who is also the Acting Chief Executive Officer), the ATU staff, the staff of the CHIETA’s Relationships Unit, the National Artisan Training Committee and the CHIETA’s Governing Board.

Of the 320 applicants who qualified to enter the competition, 60 were females. Twenty-seven finalists went through to the final round held in May 2013. Sponsorships and other types of support were secured from a number of CHIETA companies. The competition has proven to be a successful partnership between the CHIETA and its industry partners.

Overcoming challenges

In 2012/13 there was initially a lower than expected uptake of apprentices within the Chemical Sector. Financial incentives were reviewed and internal processes improved to increase efficiencies. The LP&QA Division focused on stakeholder forums and meetings to explore apprenticeship training challenges and proposed solutions. It also reported, and provided input into the national process regarding the implementation of the improved and applicable legislations. An area that still needs ongoing improvement by the ATU is the inspection of workplaces. However, the Unit is working to address this issue.

Monitoring the quality of training provision is a key function of the Division and it is task of both the ATU and the ETQA. In the NQF arena more learners were enrolled for learnerships than anticipated. For statistics refer to the Organisational Performance Report. The LP&QA Division’s task is to promote a culture of excellence in the development of skills and lifelong learning, and to ensure quality training in the workplace.


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Crucial to the Division is its role as a partner with other CHIETA Divisions to achieve the Sector Quarter Monitoring Report (SQMR) targets. Of particular importance is the bringing together of the ATU and the ETQA and streamlining their processes. This will further be strengthened after the new Learning Programme Regulations are promulgated. This closer relationship is needed since the mechanical engineering-related learnerships can culminate in successful learners being declared artisans after passing a trade test. Monitoring and auditing processes and the capturing of data will in the new financial year also be streamlined across these two Units and as well as other CHIETA Business Units.

Participation of previously disadvantaged learners in skills development continues to grow. In excess of 70% of the beneficiaries in learnerships ranging from artisan-related trades to specialist areas in diverse learnerships, including chemical operations, were black learners. The proportion of rural learners is steadily growing – a prerequisite of the National Government Agenda on rural development.

In collaboration with the stakeholders, including the CHIETA’s Chambers, the LP&QA Division will continue to position itself to be a Development and Quality Assessment Partner (DQP) to ensure that fit-for-purpose learning programmes are developed. It will also act as the Assessment Quality partner (AQP) when needed to conduct credible assessments.

Anticipated new projects

Planned new projects include upgrading the CHIETA MIS and introducing electronic records and management of the data system. This will alleviate filing space problems, devolve the uploading of selected documents to skills-development providers, and link grants disbursements to learning programmes. The National Artisan Moderating Body in partnership with the Department of Higher Education and Training and selected SETAs started conceptualising a new model for apprentice training known as the Dual System Artisan Training Programme (DSAP). In Sasolburg, Flavius Mareka FET College has started discussions with SASOL (other companies in the area will also be approached) to collaborate on training interventions. It is hoped that the College will offer the theoretical component of learning programmes and the companies the workplace component. Work-integrated training is another strong area of focus. In this regard the CHIETA needs greater cooperation from our companies. We are confident that going forward work-integrated learning will be support by all role players in skills-development within the Chemical Industry.

lP&QA


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GRANTS AND STRATEGIC PROJECTS


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Grants and Strategic Projects

Grant applications and disbursements exceed all projections

Thapelo MadibengExecutive Manager: Strategic Projects

Legislative context

The past 12 months at the Grants Management and Strategic Projects Division have been characterised by significant regulatory and policy skills development-related changes. On 3 December 2012, the Minister of Higher Education issued a Government Gazette Notice on the new SETA Grants Regulations. These regulations sought to define and contain administrative costs, and the excessive surplus and carry-over costs at the end of the financial year. The new regulations will ensure that there is funding for the QCTO and for CHIETA to prioritise the PIVOTAL, scarce and critical skills programmes in the occupational learning pathway, and limit the considerable spending of SETA grants on short courses and noncore programmes.

The regulations aim to improve the quality of labour market information collected by SETAs from employers, and the quality of the WSPs-ATRs. They also attempt to clarify terminology challenges in the Skills Development Act and related regulations. The terminology includes, but is not limited to, surplus versus commitments, levies paid by employers, administrative costs versus project-management costs, and work-integrated learning versus work experience.

The regulations also aim to change the balance between the private and public provision of skills-development programmes, and ensure that SETAs will allocate Discretionary Grants that prioritises the offering of skills-development programmes to address sector needs, through public education and training institutions.

To this end, the CHIETA Governing Board approved a new CHIETA Funding Policy on 28 January 2013, aligned to the new SETA grant regulations.

The CHIETA BBBEE/Work Transformation Programme ensures that discretionary grants are made available to the large and SME enterprises to support development of middle and senior black managers, including females in the Chemical Sector. The grants are directly linked to improvements in participation of BEE firms as well as enterprises in the sector that would like to improve their BBBEE credentials.


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The NAMB had issued a draft policy on the administration and disbursement of the artisan grants to participating employers. This draft policy proposed major changes to the administration and management of the apprenticeships or engineering/artisan learnerships grants, and seek to standardise artisan grant levels, allocation and disbursement mechanisms across the engineering-related SETAs that implement artisan programmes. The Government Gazette notice on the Trade Test Regulations were also issued by DHET to regulate nationally, both the trade tests and the trade tests fees. A gazette for the listed trades was also issued by DHET by OFO Code containing a list of occupations recognised as trades in the Republic, and for which Discretionary Grants could be funded or utilised by the SETAs. In terms of the management and administration of learning programmes, the DHET issued learning-programme regulations and prescribed new learning-programmes agreement and skills-programme agreement. It also prescribed timelines to administer and manage all SETA-funded learning programmes. These regulations are planned for promulgation in the financial year 2013 and 2014, and will have major implications for the CHIETA Grants Management Unit and Strategic Projects Unit, as well as all the CHIETA ETDQA Division and our stakeholders.

Grants-Management Overview

The Division is responsible for the total management of the Discretionary Grants and the Mandatory Grants as well as the CHIETA Regional Offices. Despite all these regulatory and policy changes, the Grants Management Unit had disbursed a total of R141 million from 1 April 2012 to 31 March 2013, exceeding the amount of the previous financial year by 85 percent. For the year under review, the Discretionary Grants policy, framework, internal controls, processes, procedures, funding guidelines and models of the Discretionary Grant allocation were reviewed in line with the new SETA grant regulations for 2013. The CHIETA launched the Discretionary Grants Funding Policy to address some of the critical areas within the Strategic Framework of its Business Imperatives, and to address some of the critical areas of the third National Skills Development Strategy (NSDS III).

The Discretionary Funding Windows (among other critical focus areas) addresses and emphasises strong partnerships between employers, public education institutions (FET Colleges, universities, universities of technology) and private training providers, towards the promotion of work-integrated learning (WIL). WIL is a form of learning that integrates academic learning with structured periods of work experience on the sub-programmes including internships, work experience, practical training (P1 & P2) and Employment Incentive Grants awarded to employers who offer employment to CHIETA funded graduates.

The Discretionary Grants will make it easier for more people to access training and skills development to address skills shortages, and improving productivity and performance in the economy.

The key functional areas involved directly with the organisational performance-management are the CHIETA Regional Offices situated in Gauteng, KwaZulu-Natal, the Western Cape and the Eastern Cape. Through these offices, the CHIETA ensured increased stakeholder support, increased monitoring and verification, and the roll-out of an integrated project- management framework with all the business units at Head Office.

In terms of the Mandatory Grants for the year under review, 677 companies including large, medium and small companies participated in the Mandatory Grants process by the deadline. In the year under review, 50 percent of the levies paid by the employers were given back to the participants in the form of Mandatory Grants subject to submission and approval of WSPs-ATR by the CHIETA. The Mandatory Grant expense increased to 22 percent from R188 million in the prior financial year, to R215 million in the year under review.

The Mandatory Grant participant levels have increased substantially as a result of CHIETA’s new online platform and exceeded the participation projections of the year under review. CHIETA adopted a WSP-ATR online submission source data system-approach through which companies completed their source data template, after which the system automatically generated a WSP-ATR for the company. This contributed to the success of the Mandatory Grants process.


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The Grant applications and disbursement of the CHIETA exceeded all projections for the 2012/2013 financial year. In the year under review, significant funding supported critical training interventions within the Chemical Sector.

In terms of the Discretionary Grants allocations process, the applications for Discretionary Grants were oversubscribed, and after the required evaluations according to the CHIETA criteria, R164 million in funding was approved by the Grants Committee. The nature of the initiatives increased, so did the number of registered learnerships and workplace experiences, scarce and critical skills, apprenticeships, partnerships with Public FETS, some of the higher education institutions, and rural development. Incentives were also provided to companies for workplace experience and employment creation. The development of further graduate programmes assisted graduates to enter the workplace and make them more employable. The unit also promoted the recognition of prior learning (RPL) and facilitation of strategic-research programmes in collaboration with the Research and Skills Planning Unit.

As at 31 March 2013, the total CHIETA commitment based on outstanding DG contractual obligations was R349 million. This included an allocation of R164 million during the year under review to skills’ promotion as outlined in CHIETA’s financial statements. The good news is that the CHIETA does not have large amounts of funding available as a result of our commitments.

The programmes by region supported by Discretionary Grants in the 2012-2013 financial year shown in the table below:

LEARNERS NUMBERS BY PROGRAMME

NUMBER OF LEARNERS RECOMMENDED BY REGIONGAUTENG

AnD CentRAl KZn/eC WC/nC totAl18.1 18.2 18.1 18.2 18.1 18.2 18.1 18.2

ABET 561 - 153 25 15 0 729 25 APP 57 251 38 151 44 180 139 582 BBBEE 84 2 102 - 38 7 224 9 Bursaries - - 6 5 9 62 15 67 Career Guidance - 100 - 1 125 0 1235 - 2 460

COOPS, NGOs, NLPEs, and NPOs/ NVC Support 90 - - - 0 0 90 - FET learnership 264 175 115 174 52 10 431 359 FLC 112 32 110 406 28 30 250 468 GETC Learnership 46 28 26 21 12 4 84 53 Graduate Development 15 97 - 2 0 523 15 622 HET Learnership 10 17 16 8 0 0 26 25 Internships 26 132 - 311 30 79 56 522 National Priorities 94 7 10 75 0 0 104 82 Research - - - - 0 0 - - RPL 164 54 6 10 0 15 170 79 SMME 1 32 - - 0 0 1 32 SP 941 56 1 615 20 214 0 2 770 76 Work Placement 18 97 - 18 0 29 18 144 Workplace Experience 26 188 - 50 0 21 26 259 totAl 2 509 1 268 2 197 2 401 442 2 195 5 148 5 864


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Grants allocation supporting rural development

The breakdown of the 2012-2013 Discretionary Grants supporting rural development by region is shown below:

Gauteng and Central R27 922 575.88KZN/Eastern Cape R974 500.00Western Cape R6 971 259.00total R35 868 334.88

CHIETA delivers on its Grant Mandate

While certain capacity constraints have been experienced by the organisation for the year under review, these did not impact on the ultimate delivery of CHIETA to its stakeholders, nor were the achievement of our strategic objectives and grant-related targets compromised.

Furthermore, the CHIETA Grants Committee has provided good oversight of the Discretionary and Mandatory Grants processes.

Strategic Projects Overview

It was a positive year for Strategic Projects, which are flagship organisational interventions that yield significant and sustainable impact on all the delivery areas of CHIETA.

Strategic projects were funded through Discretionary Grant monies and monitored continuously in terms of project and financial performance, and reported on quarterly to the Accounting Authority. Strategic Projects covered a range of functional areas with project owners across CHIETA business units assuming accountability for the deliverables on budget, on time and in line with the pre-determined performance standards defined.

Of further significance was the linkage of each Strategic Project to the various Goals, Outcomes and Outputs as defined in the NSDS III to ensure resource and organisational focus, and relevance to the skills’ development challenges and opportunities in the Strategic Framework.

projects

Regional Stakeholder Support

In terms of project deliverables, Regional Skills Forums were held in April and May 2012, on WSP-ATR/Mandatory Grant processes and in September and November 2012, to update stakeholders on the new artisan development, administration and grants-disbursement draft policy. The forums also updated stakeholders on the progress in the CHIETA Chamber mandate process and the SSP. In November 2012, sector stakeholders were updated on the new legislation framework of the National Skills Development Strategy III, learning programme regulations, Department of Trade and Industry regulations (Draft Revised BBBEE Codes of Good Practice), listed trade and gazette regulations, as well as artisan-development processes. RSFs were held in four regions: Gauteng, the Western Cape, KwaZulu-Natal and the Eastern Cape. They were attended by CHIETA’s levy-paying companies, accredited providers, labour organisations within the Chemical Sector, and CHIETA-linked public FETs and HETs.


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Trade Union Capacity-Building Programme

In support of the National Skills Accord to ensure increased stakeholder participation in skills development, the Grants Committee of the CHIETA has approved a budget of R4,000,000 towards Phase One of Trade Union Capacity-Building Programme (Skills Development within the Chemical Sector). Five unions were supported during the year under review, as per the table below:

trade union name MoA Deliverables Number of beneficiariesSACWU One joint workshop 150SOLIDARITY Three provincial workshops

Mpumalanga 34Western Cape 31Gauteng 14

CEPPWAWU Three workshops 250UASA* 1 joint workshop 60 (planned)GIWUSA* 2 workshops 100 planned

30 delegates* Capacity-building training is planned for quarter 1 in the 2013/2014 financial year.

In summary, a total of 479 shop stewards within the respective trade unions in the Chemical Sector have received the Phase One skills-development training as at 31 March 2013.

CHIetA Bursary project

The CHIETA Board approved a budget of R5,000,000 for bursaries for 2012-2013 towards supporting students to follow disciplines and careers in the Chemical Industry. The CHIETA placed advertisements in the national newspapers and received bursary applications from all nine provinces.

CHIETA bursary fields of study include:

◊ Analytical Chemistry ◊ Civil Engineering

◊ Biochemistry ◊ Operations Management

◊ Biomedical Technology ◊ Electrical Engineering

◊ Chemical Engineering ◊ Environmental Science

◊ Mechanical Engineering ◊ Industrial Engineering

◊ Polymer Technology ◊ Bachelor of Science in Engineering


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A total of 109 bursars have been supported by the CHIETA bursary project during the year under review as per enrolments:

Undergraduate Degree:

◊ Science: 36 Students◊ Engineering: 69 Students

Honours Degree: 2 Students

Masters Degree: 2 Students

CHIETA Voucher Scheme

There was a good uptake of the CHIETA Voucher Scheme by accredited providers and potential providers from all sectors, institutions and companies. Small and micro companies were encouraged to use the opportunity to participate in the scheme. Programmes covered included: SMME development, training of coaches and mentors, training of SDF, assessors, moderator and facilitator training to specified unit standards, assessor, moderator and facilitator training and constituent registration with CHIETA and technical skills-development for small companies within the Chemical Sector.

ISOE Projects

CHIETA has supported two Institutes of Sectoral Occupational Excellence (ISOEs) projects in the glass subsector and paint manufacturers subsector for the year under review. The ISOE for excellence and skills training in the glass subsector and the painting and surface-coating subsector has been established and will be launched in the new financial year. CHIETA is investigating ISOEs for the pharmaceutical, explosives/fertilisers and petrochemical subsectors.

In the petrochemical subsectors, CHIETA has developed a skills-development framework in partnership with the University of the Witwatersrand and SAPIA for the petrochemical sector. It is a CHIETA flagship project and is divided in three phases. Phase One: eight learners have registered with Wits in the MSc in petroleum engineering, a new qualification not previously available in South Africa. The project is the first of its kind in the country. Five learners are to be registered in the new financial year for a BSC in petroleum engineering (oil and gas) in partnership with Curtain University in Australia, subject to approval by the stakeholders involved in the project. Phases Two and Three will be rolled out in the new financial year.

CHIETA Offices in Public FET Colleges

The CHIETA Accounting Authority has approved funding to Ehlanzeni FET to the value of R1,800,000 to support the DHET FET Opening Project. The key deliverables of the CHIETA-Ehlanzeni FET project are the following:

◊ Ehlanzeni FET Learner Work Placement: The Workplace Task Team has been established and comprises FET college student support officers, education specialists and the CHIETA to place NCV learners in work-based experience relevant to their registered programmes. The placement is planned for the second quarter in the 2013/2014 financial year.


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◊ FET College Lecturer Capacitation: 40 lecturers trained so far through CHIETA funding, to be assessors, moderators and coaches in preparation for college accreditation on CHIETA programmes. Registration of lecturers as constituent assessors and moderators with different SETAs, primarily CHIETA is in progress, to be completed by end July 2013. CHIETA office soliciting support from other cluster SETAs and so far, 13 lecturers are to be contracted with companies for workplace exposure in the 2013/2014 financial year.

◊ Accreditation: The CHIETA has planned a pre-evaluation audit for the FET College engineering workshops to establish gaps for accreditation. This activity is planned for the 2013/2014 financial year.

Additional activities include training and support of the 20 co-operatives, 50 SMME development, internships and career awareness across the Ehlanzeni FET campuses.

The CHIETA has entered into the Memorandum of Agreement with the South African Graduate Development Association (SAGDA) to place 50 FET college students in work-integrated learning programmes. These learners will be placed with host companies in the 2013/2014 financial year.

The first office at Nelspruit campus was opened as per the DHET timeline of 1 October 2013. To support this office, an intern has been appointed from the campus. Five additional offices supported by interns will be opened on the other Ehlanzeni campuses in the next financial year. The offices serve as a one-stop shop for a SETA service within an FET college and are supported by participating SETAs.



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Western and Northern Cape Regional Office

The Western/Northern Cape Regional Office comprises a manager, skills advisor and administrator. The primary responsibility of the staff in the region is concerned with stakeholder-relationship management, and the delivery of CHIETA objectives as spelt out in the Business Plan.

Submission of Workplace Skills Plan and Annual Training Reports

The Western/Northern Cape Regional Office started off the year under review by assisting companies with their Mandatory Grant submissions which provided credible information as an input for the compilation of the CHIETA Sector Skills Plan.

Stakeholder Support

The Region held three Regional Skills Forums with its stakeholders regarding the WSP-ATR/Mandatory Grant process, Discretionary Grant application process and introduction to Chambers, SSP and the impending artisan and learning programmes regulations. The proactive approach resulted in awards being made that reflected the skills needs identified in the CHIETA Sector Skills Plan. A wide spectrum of stakeholders including CHIETA employers, labour, FET colleges, HETs and accredited providers. The increased confidence in the FET Sector provided an opportunity for the placement of many apprentices in the Chemical Industry.

In the 2012/2013 financial year, CHIETA stakeholder companies in the Western and Northern Cape received Discretionary Grants for the following key programmes: learnerships, apprenticeships, bursaries, skills programmes and adult basic education.

Companies were supported with work-integrated learning programmes in the form of P1/P2 to support unemployed learners registered in CHIETA disciplines to obtain the requisite work experience to attain their national diploma qualifications. Companies that employed learners on a permanently after completion of the internships were supported with Workplace Placement Grant for a year. This demonstrated an increased commitment from the regional stakeholder companies in pursuit of the National Skills Development imperatives for future economic growth.

ADDING VALUERoger Adriaanse

Acting Regional Manager: Western and Northern Cape Region

CHIETA REGIONAL OFFICES



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Use of public FET Colleges as skills-development providers

A major success story is a CHIETA-sponsored infrastructure project at Northlink FET College in Cape Town. The establishment of an instrumentation laboratory for the training of technicians is the first of its kind at an FET college in the Western Cape. The project was the result of a need identified at the Chevron Refinery in Cape Town. The laboratory will serve the petro-chemical refineries and the pharmaceutical sector in the Western Cape.

Rural Development Support

In the rural part of the Western Cape, artisan-development projects in Mossel Bay and George benefited both employed and unemployed learners from those communities. In Mossel Bay, PetroSA commenced training of 208 unemployed learners while Africa Skills Village in George commenced training 80 learners in the fitting, welding, electrical and boiler making trades. These learners are either on learnerships or apprenticeship programmes and should be eligible for trade testing in approximately two years.


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KZN and Eastern Cape Regional Office

Submission of Workplace Skills Plans and Annual Training Reports

The submission of WSP-ATRs from skills-development levy contributions in KwaZulu-Natal and the Eastern Cape has increased for the year under review.

The CHIETA web-based WSP-ATR submissions process provided important data for the purpose of research and analysis, and gave an indication of what the sector had achieved in terms of training and development. The data informs the Sector Skills Plans and provides scarce and critical skills required for the Chemical Sector.

Stakeholder Support

The region encouraged participation of CHIETA companies in the KZN/EC in Discretionary Grants in 2012/2013. The Regional Office developed a public-private partnership with the Durban Chemical Cluster and eThekwini Municipality in the development of SMMEs in the sector.

An ongoing project with the Durban University of Technology provided workplace experience for 50 students in the year under review. The Chemical Incubator in developing small chemical companies in Port Elizabeth, has also been supported with Discretionary Grants during the year under review.

A Chemical Technology Station has been established at Mangosuthu University of Technology (MUT) in Durban which is pioneering expertise in processing of chemical products for chemical engineering students for example, soap and detergent-making. CHIETA has awarded MUT a Discretionary Grant and students have been given workplace experience required to obtain their qualification. Students have also been exposed to real workplaces in the industry in the area. Their processes also encourage SMME development so that possible business start-ups become a reality.

The CHIETA also funded the training of shop stewards in the Chemical Sector in Occupational Health and Safety in the year under review. This project was in partnership with the University of KwaZulu-Natal and 26 shop stewards received training.


FOCUSING ON DELIVERY Rajen Naidoo

Manager: KwaZulu-Natal and Eastern Cape Region



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The use of Public FET Colleges as skills-development programmes

Artisan Development through the use of public FET colleges remains a priority. Umfolozi FET College has been supported with Discretionary Grants to facilitate three-year practical artisan training for unemployed learners. The college has established partnerships with industry to provide the requisite apprenticeship workplace experience for learners to become qualified artisans.


The Regional Office has also implemented a rural-development project where 800 learners received additional lessons in maths and science subjects. The CHIETA partnered with Busisiwe Communications to implement a mathematics and science intervention in three Umgungundlovu Municipalities, namely uMsunduzi, Impendle and uMngeni supporting rural high schools. The project was a pilot exercise and has achieved a 29% overall improvement in mathematics and science pass rates as compared to the matric pass rate in these municipalities for the year 2011. The CHIETA firmly believe interventions like these can assist to improve matric pass rates.

Strategic Infrastructure Projects planned for the new year

There are major expansion plans for KwaZulu-Natal, one of them being the construction of the new Durban Dig-Out Port which will involve digging up the old airport and extending the current harbour. This will affect the Durban South Basin, our chemical hub in the manufacture, storage and distribution of chemical products. CHIETA plans to position itself in the new year so that the anticipated skills needs are identified and our sector can respond accordingly.

The construction of the Durban/Gauteng Chemical Pipeline also provides challenges in meeting the right skills needs at the Coega development, with its planned refinery by PetroSA. These developments will certainly have a huge impact on the Chemical Sector, and CHIETA will have to respond accordingly with appropriate skills development interventions in partnership with the Premier’s Office in the provinces.



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Gauteng and Central Office

The Gauteng and Central Regional Office played a crucial role in the operations of the CHIETA, as more than 50 percent of all the CHIETA levy-paying stakeholders in the country are situated here. In the reporting period, the office was responsible for a vast area that encompasses Gauteng, the Free State, North West, Mpumalanga and Limpopo provinces. All nine sub-sectors fall within this region namely base chemicals, explosives, fertilisers, glass, petroleum, pharmaceuticals, speciality chemicals, surface coatings and fast moving consumer goods.

Submission of Workplace Skills Plan and Annual Training Reports

The largest number of the WSP-ATR submissions to CHIETA came from companies in the Gauteng and the Central region. Critical to running an efficient service was ensuring that the WSP-ATR Online Submission Database was constantly updated with relevant and new information.

Stakeholder Support

The region provided stakeholders with the support required to access the Mandatory and Discretionary Grants, as well as verifying and monitoring ongoing projects. As part of providing stakeholder support, this office held three regional skills forums including a workshop at the beginning of 2013 to inform stakeholders about how to apply for their WSP-ATR/Mandatory Grants.

The Mandatory Grant cycle for 2011/2012 was completed successfully and plans were put in place to close old Discretionary Grant projects for the year under review.

The Region has awarded the largest number of Discretionary Grants to CHIETA Gauteng and Central companies. The programmes awarded are in line with the CHIETA Sector Skills Plan.

SUPPORTING CHIETA’S LARGEST REGIONBongani Mtshali

Acting Regional Manager: Gauteng and Central Office




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CHIETA has signed a Memorandum of Agreement with the University of Limpopo to establish mobile laboratory equipment to support rural science schools in Limpopo with maths and science. These schools do not have the requisite science laboratory and capacity to assist learners to obtain good pass marks in maths and science to enter Chemical Sector disciplines. The project will be rolled out in the new year and will also include Teacher Development in collaboration with the University of Limpopo’s Department of Pharmacy. Furthermore, the Gauteng and Central Office supported new Venture Creation Training for Co-operatives around Welkom in the Free State.

Use of FET Colleges as skills-development programmes

The CHIETA signed a Memorandum of Agreement with the University of North West (Potchefstroom) to train 30 women occupying leadership and management positions at four public FETs in North West. The University registered 30 learners in the National Advanced Certificate in management. The learners will graduate in September 2014. The Orbit and Vuselela FET colleges are involved. CHIETA has opened an office at the Ehlanzeni FET College and will continue to open a further five offices in the new financial year.



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GOVERnAnCE And Risk


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Governance and Risk

Reaping the rewards of good governance

Trevor Channing Group Executive Governance and Risk

The past year has been significant for the organisation’s performance, and we have attained the goals we set for ourselves at the beginning of the financial year under review.

The unit oversaw six areas in the organisation, namely:

◊ Governance◊ Risk management◊ Organisational Performance◊ Information Technology◊ Stakeholder Relationships◊ Internal Audit and External Audit procedures in conjunction with the Finance Business Unit

Governance

The Governance and Risk Unit has strategic and functional oversight on governance and compliance frameworks across CHIETA Business Units, ensuring that we disperse on the CHIETA mandate within a compliant organisational culture. Within each business unit, each executive and manager is also tasked with the responsibility to ensures compliance in terms of the relevant Skills Development and related legislation, Government Policy frameworks inclusive of NSDS III, Treasury’s frameworks, the Public Finance Management Act (PFMA) and governance best practice captured and defined in King III.

A holistic view of governance and compliance was adopted by way of a CHIETA Legal and Compliance Register with stringent monitoring and evaluation interventions, to ensure a positive CHIETA Compliance profile that contributes significantly to an accountable and performance-driven delivery platform for all CHIETA stakeholders.

The CHIETA governance structures are organised in terms of the approved CHIETA constitution, which articulates how the Governing Board, Board Committees and the relevant stakeholder structures should function and relate to each other in discharging of their fiduciary duties in a responsible and sustainable manner.


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Governance and Risk

The CHIETA has a Governing Board comprising of 15 members appointed by the Minister of Higher Education and Training, and represents all the stakeholder constituencies in the Chemical Industry. Five key Board Committees supports the Governing Board in discharging their mandate namely, the Executive Committee (EXCO), Audit Committee, Grants Committee, Governance and Strategy Committee and the Finance and Remuneration Committee.

Although most CHIETA Governing Board members are nominated from their respective constituencies, all members functioned first and foremost as Board members who dispersed of their oversight function with care, independence and objectivity.

One of our strategic and functional advantages within CHIETA is the smooth and efficient manner in which the CHIETA Governance structures are managing their oversight function. Different and diverse strategic aspects were robustly discussed in the various committees and considered for recommendation and approval to the Governing Board, which allowed for timeous and enabling mandates for management to ensure excellent delivery to our stakeholders.

Risk Management

Organisational wide risk management has become a way of life for the CHIETA. The Governing Board conducted a strategic Risk-Management Workshop in October 2012, defining the top strategic organisational risks to CHIETA that can potentially hinder the effective and successful execution of our mandate. It was an extremely successful workshop, where strategic organisational risks were described in detail and linked to the CHIETA Strategic Plan and deliverables with inherent and residual risk scores and all important mitigating controls to ensure that all the defined risks are managed within the risk-appetite level set by the CHIETA Governing Board.

Simultaneously, a similar exercise was held with all the CHIETA business units articulating and defining their respective operational risks, with subsequent risk scores and mitigating controls and treatments.

Risk Management has been identified by the Governing Board as one of the priority areas in ensuring the disbursement of the CHIETA skills-development mandate for the Chemical Sector in a sustainable manner and in direct support of the broader socio-economic challenges facing our country. To this effect, the Board has also approved a new Risk- Management Policy to clarify rolls and accountability on all collective levels of the organisation, to ensure an effective and integrated risk-management framework for the organisation.

Information Technology

The Information Technology Unit has been, apart from normal functional and operational support to Business Units, also focussed strongly on a proper IT Governance Framework across all organisational processes to further position IT as an integral part of the strategic and performance planning processes of CHIETA.

From a governance perspective, the MANCO functioned as the IT Steering Committee as per the best practice framework articulated in KING III, to ensure that the CHIETA’s IT platform was continuously aligned and supportive to our Strategic Plan and performance deliverables. Specific emphasis was also placed on upgrading and stabilising our IT hardware and software platforms, the IT security protocols and IT business continuity.

Further enrichments are currently in process on the CHIETA IT platform to align to the new Public Sector IT Governance protocol where Phase One will be implemented and fully operational by March 2014, which will further strengthen the delivery and service standards of CHIETA towards all of its stakeholders.


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Organisational Performance

The CHIETA Governing Board recommended a five-year Strategic Plan and an Annual Performance Plan for 2012/13 to the Minister of Higher Education and Training and which was subsequently approved by the Honourable Minister for implementation. It articulated 50 predetermined performance targets across ten(10) strategic programmes in support of the NSDS III, government priority and policy frameworks, as well as stakeholder and industry requirements.

Both the Strategic Plan and Annual Performance Plan were aligned to the CHIETA’s Sector Skills Plan, which defines the critical and scarce skills requirements for the Chemical Sector. The detailed CHIETA Performance Report is captured on pages 43-60.

Organisational performance was excellent and the CHIETA has met or exceeded forty nine (49) of its fifty (50) predetermined targets which indicates clearly CHIETA’s commitment to delivery and impact on the Chemical Sector and National Skills Development agenda of South Africa.

CHIETA followed a balanced and integrated approach towards sector skills planning, strategy, governance and sustainability. Apart from the pure quantitative numbers in the performance report, focus was placed on developing quality scarce and critical skills sets for the Chemical Industry to support sector sustainability. Focus was also placed on green skills development for the environmental benefit of the industry and broader society. The relevant impact CHIETA’s skills development interventions had on National priorities and imperatives are also articulated further in the under-mentioned paragraph.

The CHIETA supported 7 332 learners in the year under review. Off those learners 3 454 (47 %) were employed and 3 878(53%) were unemployed learners; while 5 526 (75 percent) were from designated groups. An encouraging 1 867 (25 percent) were female learners; and 4 812 (66 percent) were youth (35 years and younger). A total of 114 (1.6 percent) were disabled learners and 2 715 (70 percent) of unemployed learners came from rural areas. The performance report and scores obtained by the CHIETA were also subjected extensively to Internal and External Audit processes to confirm accuracy and reliability of the performance information reported.

Internal and External Audit

The unit worked closely with Internal and External Auditors to continuously ensure an acceptable control and value- adding environment across CHIETA Business Units to inter alia, provide comfort and sustain stakeholder confidence that CHIETA is performing and delivering excellently within a transparent, accountable an compliant organisational environment.

Governance and Risk


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Governance and Risk

Stakeholder Relationships

In the year under review, stakeholder relationships focused on ensuring an integrated presentation of the CHIETA brand and sustained reputational management. This was supported through dedicated stakeholder events, media exposure and career exhibitions.

CHIETA focused on high visibility in the media, and specifically radio through to communicate the mandate and focal areas of CHIETA. It created awareness among stakeholders and learners on skills-development interventions and opportunities within the Chemical Sector.

The Stakeholder Relationships Unit supported and participated through career exhibitions with a strong rural bias in support of Strategic Programme 8, articulated in our Organisational Performance Report. We also exceeded our targets on learners exposed to CHIETA career exhibitions.

A dipstick stakeholder satisfaction survey was conducted that assisted CHIETA in implementing remedial and pro-active controls to enrich and sustain our service-delivery standards to CHIETA stakeholders.

The introduction of a CHIETA newsletter facilitated by the unit contributed significantly to the enhancement of transparent and open communication channels, within and outside of the CHIETA.

The enhancement and continuous improvement of the functionality of the CHIETA website will be a key focus area for reaching and attracting a diverse and wide stakeholder base in 2013/14.

As a stakeholder-driven organisation, the unit will maintain their momentum to ensure sustainable and supportive relationships with all CHIETA stakeholders going forward. The good and solid foundation that has been laid will serve as a springboard launching us into 2013/14.

Making sure everyone knows the CHIETA is the institute of choice for learners

Glory Nyathi Stakeholder Relationship Manager


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HuMAN RESOuRCES


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Human Resources

Cultivating a high-performance culture in the workplace

Joyce LotzHuman Resources Manager

The Human Resources Unit maintained their support as a value-adding business partner to CHIETA Business Units through the provision of the following HR services:

◊ Organisational design such as structural alignments and job profiling.◊ People-procurement interventions pertaining to recruitment, selection and induction processes.◊ Management of the Performance-Management Policy and Procedures.◊ Capacity-building interventions.◊ Interventions pertaining to service conditions’ management, human resources’ administration, labour-relations’

management and the implementation of employee well-being programmes.

Staff workshops were held where Business Units and staff members were given the opportunity to provide input on the CHIETA Strategic Plan and the performance contributions of each Business Unit towards delivery and sustained performance. The initiative had a positive impact on staff morale and resulted in a better understanding of the CHIETA’s strategic objectives.

Awareness initiatives were conducted, with particular focus on organisational risk-management and the CHIETA Fraud Prevention Plan. New staff were inducted and staff capacity-needs addressed according to development needs.

Staff development was promoted through study assistance offered by the CHIETA, with various employees furthering their studies.

CHIETA embarked on a change-management initiative. The objective was to optimise CHIETA business processes in support of the alignment of key compliance frameworks such as, inter alia, the newly promulgated SETA grant regulations. Change Management is ongoing with the expectation of further strengthening relationships within the organisation to ultimately benefit CHIETA stakeholders.

Employee well-being remains a key focus area for CHIETA. ICAS, the appointed wellness service provider, continued to provide a 24/7 confidential service to all CHIETA employees during the year under review. Further wellness interventions have been planned for the new financial year.


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Significant progress was made in the development of a new HR Policy Framework, aligned to the modern world of work and business requirements.

Interns

During the year under review, two interns were placed at CHIETA: one at Ehlanzeni Public FET College and the other at the CHIETA Head Office.

The intern programme has proved to be successful in that six out of 11 interns from the previous year have been employed by CHIETA.

Some HR initiatives planned for 2013/2014

◊ A fully-functional and integrated HR information system (HRIS).◊ Implementation of competency-based assessment tools for the purpose of recruitment and staff development.◊ Implementation of a revised performance-management system.◊ Implementation of a revised Personal Development Plan (PDP) process.◊ Various change-management projects.

CHIETA Staff Profile

Categories of Position

Afr

ican

Colo

ured

Indi

an

Whi

te

Dis

able

d

tota

l Fe

mal

es

Afr

ican

Colo

ured

Indi

an

Whi

te

Dis

able

d

tota

l Mal

es

Acting CEO 0 0 1 0 1 1 0 0 0 0 0 0Executive Managers 0 0 0 1 0 1 1 0 1 1 0 3Manager 3 0 0 1 0 4 2 0 2 0 0 4Regional Skills Advisors 1 0 1 0 0 2 4 1 1 1 0 7Specialists 1 0 0 1 0 2 4 1 0 0 0 5Accountant 0 0 0 0 0 0 1 0 0 0 0 1Practitioners 3 1 0 0 0 4 2 0 0 0 0 2Administators 8 1 0 0 0 9 1 0 0 0 0 1Assistant Administrators, Filing Clerk, Data Capturers 4 0 0 0 0 4 8 0 0 0 0 8Interns 2 0 0 0 0 2 0 0 0 0 0 0Office Attendants/ Cleaners 1 0 0 0 0 1 0 0 0 0 0 0Grand Totals per Category 23 2 2 3 1 30 23 2 4 2 0 31

Human Resources


41

Organisational Structure

CHIETA GOVERNING BOARD

CHIeF eXeCutIVe oFFICeR

Chief Financial Officer

Executive: Learning

Programmes and Quality Assurance

Executive: Research and Skills Planning

Executive: Strategic Projects

Executive: Governance

and Risk

Human Resources

◊ Financial Management

◊ Supply-Chain Management

◊ External Audit

◊ Learning Programme Development and Implementation◊ Learnerships◊ Apprenticeships◊ Quality Assurance◊ Certification

◊ Data Management◊ Quality Management

System

◊ Research and Development

◊ Sector Skills Planning

◊ Chambers and Research and Skills Planning Committee

◊ Discretionary and Mandatory Grants

◊ Strategic Projects◊ Regional Offices

− Western and Northern Cape

− KZN and Eastern Cape

− Gauteng and Central Regions

◊ Governance and Compliance

◊ Risk Management◊ Internal Audit◊ IT ◊ Performance

reporting◊ Governing

Board and Board Committees

◊ Strategic Planning◊ Stakeholder

Relations


42

CHIETA PERFORMANCE REPORT 2012/2013


43

The CHIETA’S Organisational Performance

The National Skills Development Strategy III became operational on 1 April 2011. The CHIETA embraced this visionary strategy with an expanded focus of alleviating poverty through job creation and increased productivity utilising focused and relevant skills-development interventions within the Chemical Sector.

The CHIETA Strategic Plan and Annual Performance Plan 2012/13 defined and articulated the CHIETA’s response and impact on national imperatives and stakeholder needs. The CHIETA Sector Skills Plan is a stakeholder-driven intervention and together with National Government imperatives, forms the backbone and key strategic thrusts for the development of our strategic and organisational performance areas. It has specific reference to scarce and critical skills needs within the Chemical Sector, while contributing to a sustainable and global competitive Chemical Sector.

The CHIETA Strategic Plan and Annual Performance Plan have been conceptualised into 10 strategic programmes and relevant performance indicators, with 50 pre-determined targets. These measurable targets address relevant skills-development imperatives around the CHIETA SSP, occupationally-directed interventions, partnerships between employers, public education institutions such as FETs, universities of technology, universities and private training providers. It also addressed targets pertaining to grant disbursements, career guidance, workplace experience, adult education, and strategic projects in support of Government sector-priority, support provided to small business, NGOs, CBOs and CBCs and dedicated support on the performance targets of the Minister of HET with the President of South Africa.

The monitoring and evaluation of organisational performance is a dynamic process within the organisation, and each Business Unit performance owner is held accountable in terms of their relevant contribution to specific performance target(s) and agreed deliverables.

Strong oversight exists within the CHIETA Governance Structures with quarterly performance reports presented to the CHIETA Governing Board by the Governance and Strategy Board Committee for monitoring and evaluation, and pro-active remedial interventions where needed.

Of the fifty (50) pre-determined performance targets, 49 (98%) were met or exceeded.

Apart from the aforementioned, the following relevant characteristics from the CHIETA Performance Profile were evident, namely:

◊ A total of 7 332 learners participated in CHIETA Skills-Development Programmes and Interventions.◊ Of the learners who participated, 3 454 (47%) were employed while 3 878 (53%) were unemployed.◊ Of the learners who participated, 5 526 (75%) were from designated groups.◊ Of the learners who participated, 1 867 (25%) were female.◊ Of the learners who participated, 4 812 (66%) were from the youth.◊ CHIETA trained 114 disabled learners.◊ Of the unemployed learners who participated, 2 715 (70%) came from rural areas.

The detailed performance report per each performance indicator follows.


44

CHiETA Organisational AlignmentN

SDSI

II, G

OV

ERN

MEN

T, S

TAKE

HO

LDER

AN

D L

EGIS

LATI

VE

CON

TEXT

AN

D G

OV

ERN

ING

BO

ARD

Prog

ram

me

1Re

sear

ch a

nd

Skill

s Pl

anni

ng

Prog

ram

me

2O

ccup

ation

ally

D

irect

ed

Prog

ram

mes

Prog

ram

me

3FE

T Co

llege

sPr

ogra

mm

e 4

Yout

h &

Adu

lt La

ngua

ge a

nd

Num

erac

y Sk

ills

Prog

ram

me

5W

orkp

lace

-Ba

sed

Skill

s D

evel

opm

ent

Prog

ram

me

6Su

ppor

t to

Smal

l Bu

sine

ss,

Co-o

ps, N

GO

s an

d CB

Os

Prog

ram

me

7Pu

blic

Sec

tor

Capa

city

Prog

ram

me

8Ca

reer

and

Vo

catio

nal

Gui

danc

e

Prog

ram

me

9M

ediu

m-T

erm

G

over

nmen

t Pr

iori

ties

Prog

ram

me

10Su

ppor

t to

Min

iste

r of

HET

’s

Serv

ice-

Leve

l A

gree

men

t with

Pr

esid

ent o

f So

uth

Afr

ica

◊ SS

P U

pdat

e◊

Sect

or

Rese

arch

Re

port

s th

roug

h Re

sear

ch

Part

ners

hips

◊ Em

ploy

ed /

un

empl

oyed

le

arne

rshi

ps,

inte

rnsh

ips,

sk

ills

prog

ram

mes

, bu

rsar

ies,

ar

tisan

s en

tere

d an

d ce

rtifie

d

◊ W

orkp

lace

- in

tegr

ated

le

arni

ng (W

IL)

◊ FE

T Co

llege

Pa

rtne

rshi

ps◊

CHIE

TA

pres

ence

at

FET

Colle

ges

◊ A

ET,

ABE

T, F

LC,

Brid

ging

and

fo

unda

tiona

l pr

ogra

mm

es

◊ M

G p

aid

to

larg

e, m

ediu

m

and

smal

l

com

pani

es

◊ Su

ppor

t to

co-

ops,

SM

MEs

, N

GO

s, C

BOs,

CB

Cs a

nd

wor

ker-

initi

ated

tr

aini

ng

◊ IS

OEs

id

entifi

ed a

nd

supp

orte

d

◊ Le

arne

rs

rece

ivin

g

care

er

guid

ance

on

car

eers

in

Che

mic

al

Sect

or

◊ D

edic

ated

st

rate

gic

proj

ects

in

supp

ort o

f G

over

nmen

t

impe

rativ

es

◊ Le

arne

rs

assi

sted

w

ith m

atri

c to

obt

ain

univ

ersi

ty

entr

ance

◊ In

crea

se

grad

uate

ou

tput

in

Engi

neer

ing

and

Nat

ural

Sc

ienc

es◊

Incr

ease

gr

adua

te

outp

ut

in H

ons,

M

aste

rs,

PHD

and

Pos

t D

octo

rate

s◊

Indu

stry

/

univ

ersi

ty

part

ners

hips

BASE

LIN

E TA

RGET

20

12/1

3: 2

BASE

LIN

E TA

RGET

20

12/1

3: 7

031

BASE

LIN

E TA

RGET

20

12/1

3: 4

69

BASE

LIN

E TA

RGET

20

12/1

3: 1

87

BASE

LIN

E TA

RGET

20

12/1

3: 2

110

BASE

LIN

E TA

RGET

20

12/1

3: 1

14

BASE

LIN

E TA

RGET

20

12/1

3: 2

BASE

LIN

E TA

RGET

20

12/1

3: 5

00

BASE

LIN

E TA

RGET

20

12/1

3: 4

BASE

LIN

E TA

RGET

20

12/1

3: 2

33

Busi

ness

uni

tsRe

sear

ch a

nd

Skill

s Pl

anni

ng,

Gra

nts,

Reg

ions

Busi

ness

uni

tsG

rant

s,

Regi

ons,

ETQ

A,

App

renti

cesh

ip,

Proj

ects

(Bur

sari

es)

Busi

ness

uni

tsG

rant

s, P

roje

cts,

Re

gion

s

Busi

ness

uni

tsG

rant

s, R

egio

nsBu

sine

ss u

nits

Gra

nts,

Reg

ions

Busi

ness

uni

tsG

rant

s, P

roje

cts,

Re

gion

s

Busi

ness

uni

tsG

rant

s, P

roje

cts,

Re

gion

s

Busi

ness

uni

tsG

rant

s, P

roje

cts,

Re

gion

s,

Rese

arch

and

Sk

ills

Plan

ning

Busi

ness

uni

tsG

rant

s, P

roje

cts,

Re

gion

s

Busi

ness

uni

tsPr

ojec

ts,

Gra

nts,

Reg

ions

, G

over

nanc

e,

Fina

nce,

HET

CEO

, Fin

ance

, Gov

erna

nce

cros

s-cu

tting

on

stra

tegi

c an

d fu

ncti

onal

leve

ls o

ver

all 1

0 St

rate

gic

Prog

ram

mes

CHIE

TA U

PDAT

ED S

SP 2

013

– 20

18

CHIE

TA S

TRAT

EGIC

PLA

N 2

011

– 20

16 A

ND

AN

NU

AL

PERF

ORM

AN

CE P

LAN

201

2/13

10 S

TRAT

EGIC

PRO

GRA

MM

ES A

ND

PER

FORM

AN

CE T

ARG

ETS


45

The CHiETA’s Organisational Performance

PRO

GRA

MM

E 1:

RES

EARC

H A

ND

SKI

LLS

PLA

NN

ING

perf

orm

ance

Indi

cato

r20

12/1

3Ta

rget

Act

ual

Q1

Act

ual

Q2

Act

ual

Q3

Act

ual

Q4

tota

lVa

rian

ceSt

atus

2012

/13

Ach

ieve

dCo

mm

ents

1.1.

1SS

P U

pdat

e1

01

00

10

100%

Targ

et a

chie

ved.

Upd

ated

CH

IETA

SSP

sub

mitt

ed b

y de

adlin

e as

per

com

plia

nce

fram

ewor

k of

the

DH

ET.

1.1.

2N

umbe

r o

f Sec

tor

Rese

arch

repo

rts

thro

ugh

Rese

arch

Pa

rtne

rshi

ps

10

02

24

+340

0%Ta

rget

exc

eede

d. T

his

indi

cato

r w

as a

chie

ved

thro

ugh

our

Dis

creti

onar

y G

rant

s Fu

ndin

g Pr

ogra

mm

e th

at fo

cuse

d pr

imar

ily o

n th

e N

ation

al Im

pera

tives

of

the

NSD

S III

. In

term

s of

the

CHIE

TA D

iscr

etion

ary

Gra

nts

Fund

ing

Win

dow

rele

vant

re

sear

ch a

pplic

ation

s w

ere

rece

ived

, con

side

red

and

appr

oved

as

part

of t

he

evol

ving

rese

arch

age

nda

of

the

CHIE

TA.

1.1.

3Ba

selin

e2

01

22

5+3

250%

Base

line

targ

et e

xcee

ded.

KEY

Targ

et a

chie

ved

or e

xcee

ded

as p

er c

omm

ents

col

umn

No

targ

ets

set f

or 2

012/

13 a

s pe

r CH

IETA

Str

ateg

ic P

lan

and

APP

201

2/13

Subs

tanti

al m

ovem

ent o

n ac

tual

ach

ieve

men

t, b

ut m

argi

nally

beh

ind

annu

al ta

rget

◊ N

ote:

Tar

gets

ach

ieve

d an

d ex

ceed

ed a

re w

ithin

the

cont

ext o

f the

CH

IETA

Str

ateg

ic P

lan

and

pre-

dete

rmin

ed 2

012/

13 p

erfo

rman

ce

targ

ets

reco

mm

ende

d by

the

CHIE

TA A

ccou

nting

Aut

hori

ty a

nd a

ppro

ved

by th

e M

inis

ter

of H

ighe

r Ed

ucati

on a

nd T

rain

ing.


46

PRO

GRA

MM

E 2:

OCC

UPA

TIO

NA

LLY-

DIR

ECTE

D P

ROG

RAM

ME

perf

orm

ance

Indi

cato

r20

12/1

3Ta

rget

Act

ual

Q1

Act

ual

Q2

Act

ual

Q3

Act

ual

Q4

tota

lVa

rian

ceSt

atus

2012

/13

Ach

ieve

dCo

mm

ents

2.1.

1Em

ploy

ed

lear

ners

hips

ent

ered

85

085

00

100%

Targ

et a

chie

ved.

Ente

red

prev

ious

fin

anci

al y

ear

420

Ente

red

curr

ent

finan

cial

yea

r12

824

037

25

2.1.

2Em

ploy

ed b

ursa

ries

en

tere

d50

00

050

500

100%

Targ

et a

chie

ved.

2.1.

3Em

ploy

ed in

tern

ship

s en

tere

d0

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

CHIE

TA m

embe

r co

mpa

nies

ge

nera

lly d

o no

t im

plem

ent

inte

rnsh

ip p

rogr

amm

es fo

r th

eir

empl

oyee

s an

d th

eref

ore

no ta

rget

was

set

. The

focu

s on

in

tern

ship

s is

targ

eted

tow

ards

un

empl

oyed

lear

ners

.2.

1.4

Empl

oyed

Ski

lls

Prog

ram

me

ente

red

1 05

01

050

010

0%Ta

rget

ach

ieve

d.

Ente

red

prev

ious

fin

anci

al y

ear

59

Ente

red

curr

ent

finan

cial

yea

r44

1549

883


KEY

Targ

et a

chie

ved

or e

xcee

ded

as p

er c

omm

ents

col

umn

No

targ

ets

set f

or 2

012/

13 a

s pe

r CH

IETA

Str

ateg

ic P

lan

and

APP

201

2/13

Subs

tanti

al m

ovem

ent o

n ac

tual

ach

ieve

men

t, b

ut m

argi

nally

beh

ind

annu

al ta

rget

◊ N

ote:

Tar

gets

ach

ieve

d an

d ex

ceed

ed a

re w

ithin

the

cont

ext o

f the

CH

IETA

Str

ateg

ic P

lan

and

pre-

dete

rmin

ed 2

012/

13 p

erfo

rman

ce

targ

ets

reco

mm

ende

d by

the

CHIE

TA A

ccou

nting

Aut

hori

ty a

nd a

ppro

ved

by th

e M

inis

ter

of H

ighe

r Ed

ucati

on a

nd T

rain

ing.


47

perf

orm

ance

Indi

cato

r20

12/1

3Ta

rget

Act

ual

Q1

Act

ual

Q2

Act

ual

Q3

Act

ual

Q4

tota

lVa

rian

ceSt

atus

2012

/13

Ach

ieve

dCo

mm

ents

2.1.

5Em

ploy

ed le

arne

rshi

p ce

rtific

ated

425

183

193

3211

752

5+1

0012

3%Ta

rget

exc

eede

d. T

his

indi

cato

r w

as a

chie

ved

and

exce

eded

th

roug

h th

e D

iscr

etion

ary

Gra

nts

Fund

ing

Mod

el.

Mem

ber

com

pani

es re

spon

ded

very

favo

urab

ly to

this

Fun

ding

Pr

ogra

mm

e in

enh

anci

ng

prod

uctiv

ity a

nd p

erfo

rman

ce

with

in th

e w

orkp

lace

s of

the

Chem

ical

Indu

stri

es S

ecto

r. Th

e CH

IETA

cos

t- c

eilin

gs w

ere

revi

ewed

moti

vatin

g pr

ovid

ers

and

mem

ber

com

pani

es to

pa

rtici

pate

.2.

1.6

Empl

oyed

bur

sari

es

certi

ficat

ed

250

00

2525

010

0%Ta

rget

ach

ieve

d.

2.1.

7Em

ploy

ed in

tern

ship

ce

rtific

ated

0N

/AN

/AN

/AN

/AN

/AN

/AN

/AN

/AM

embe

r co

mpa

nies

do

not i

mpl

emen

t int

erns

hip

prog

ram

mes

for

thei

r em

ploy

ees

and

ther

efor

e no

ta

rget

was

set

. The

focu

s on

in

tern

ship

s ta

rget

s un

empl

oyed

le

arne

rs.

2.1.

8Em

ploy

ed S

kills

Pr

ogra

mm

e ce

rtific

ated

525

7315

259

204

551

+26

105%

Targ

et e

xcee

ded.

Mem

ber

com

pani

es w

ere

enco

urag

ed to

co

mpl

ete

the

impl

emen

tatio

n of

thei

r sk

ills

prog

ram

mes

re

sulti

ng in

a s

igni

fican

t in

crea

se o

f cer

tifica

tion

of

lear

ners

.


◊ N

ote:

Tar

gets

ach

ieve

d an

d ex

ceed

ed a

re w

ithin

the

cont

ext o

f the

CH

IETA

Str

ateg

ic P

lan

and

pre-

dete

rmin

ed 2

012/

13 p

erfo

rman

ce

targ

ets

reco

mm

ende

d by

the

CHIE

TA A

ccou

nting

Aut

hori

ty a

nd a

ppro

ved

by th

e M

inis

ter

of H

ighe

r Ed

ucati

on a

nd T

rain

ing.

PRO

GRA

MM

E 2:

OCC

UPA

TIO

NA

LLY-

DIR

ECTE

D P

ROG

RAM

ME

(con

tinu

ed)


48

perf

orm

ance

Indi

cato

r20

12/1

3Ta

rget

Act

ual

Q1

Act

ual

Q2

Act

ual

Q3

Act

ual

Q4

tota

lVa

rian

ceSt

atus

2012

/13

Ach

ieve

dCo

mm

ents

2.1.

9U

nem

ploy

ed

lear

ners

hips

ent

ered

950

2 09

1+1

141

220%

Targ

et e

xcee

ded.

Thi

s in

dica

tor

was

ach

ieve

d an

d ex

ceed

ed

thro

ugh

the

Dis

creti

onar

y G

rant

s Fu

ndin

g M

odel

. The

CH

IETA

cos

t-ce

iling

s w

ere

revi

ewed

moti

vatin

g pr

ovid

ers

and

mem

ber

com

pani

es

to p

artic

ipat

e. T

his

was

a

prio

ritis

ed a

rea

focu

sing

on

the

unem

ploy

ed.

Ente

red

prev

ious

fin

anci

al y

ear

249

Ente

red

curr

ent

finan

cial

yea

r84

769

508

481

2.1.

10U

nem

ploy

ed

burs

arie

s en

tere

d 80

00

010

910

9+2

913

6%Ta

rget

exc

eede

d. A

str

ateg

ic

proj

ect s

et u

p by

the

CHIE

TA

enco

urag

ing

unem

ploy

ed

youn

g le

arne

rs p

ursu

ing

Chem

ical

-rel

ated

cou

rses

/

care

ers

with

in th

e Ch

emic

al

Sect

or.

In th

e re

cent

en

gage

men

ts w

ith th

e D

HET

, th

e SE

TAs

wer

e re

ques

ted,

gi

ven

thei

r aff

orda

bilit

y fr

amew

orks

, to

furt

her

stre

ngth

en in

vest

men

t in

this

ar

ea.

CHIE

TA s

ubse

quen

tly

resp

onde

d po

sitiv

ely

to th

is

requ

est n

ot o

nly

for

the

2012

/13

finan

cial

yea

r, bu

t als

o in

our

Ann

ual P

erfo

rman

ce

targ

et o

n th

is in

dica

tor

for

2013

/14.


KEY

Targ

et a

chie

ved

or e

xcee

ded

as p

er c

omm

ents

col

umn

No

targ

ets

set f

or 2

012/

13 a

s pe

r CH

IETA

Str

ateg

ic P

lan

and

APP

201

2/13

Subs

tanti

al m

ovem

ent o

n ac

tual

ach

ieve

men

t, b

ut m

argi

nally

beh

ind

annu

al ta

rget

◊ N

ote:

Tar

gets

ach

ieve

d an

d ex

ceed

ed a

re w

ithin

the

cont

ext o

f the

CH

IETA

Str

ateg

ic P

lan

and

pre-

dete

rmin

ed 2

012/

13 p

erfo

rman

ce

targ

ets

reco

mm

ende

d by

the

CHIE

TA A

ccou

nting

Aut

hori

ty a

nd a

ppro

ved

by th

e M

inis

ter

of H

ighe

r Ed

ucati

on a

nd T

rain

ing.

PRO

GRA

MM

E 2:

OCC

UPA

TIO

NA

LLY-

DIR

ECTE

D P

ROG

RAM

ME

(con

tinu

ed)


49

perf

orm

ance

Indi

cato

r20

12/1

3Ta

rget

Act

ual

Q1

Act

ual

Q2

Act

ual

Q3

Act

ual

Q4

tota

lVa

rian

ceSt

atus

2012

/13

Ach

ieve

dCo

mm

ents

2.1.

11U

nem

ploy

ed

inte

rnsh

ips

ente

red

7518

012

5383

+811

1%Ta

rget

exc

eede

d. T

he

Dis

creti

onar

y G

rant

s Ro

ad

Show

s pr

iori

tised

this

are

a of

ski

lls d

evel

opm

ent a

nd

mem

ber

com

pani

es re

spon

ded

favo

urab

ly.

2.1.

12U

nem

ploy

ed s

kills

pr

ogra

mm

e en

tere

d28

028

3+3

101%

Targ

et e

xcee

ded.

A s

trat

egic

fo

cus-

driv

en p

roje

ct b

y th

e CH

IETA

with

in th

e Ch

emic

al

Sect

or a

ssis

ted

in a

chie

ving

an

d ex

ceed

ing

this

indi

cato

r by

pro

vidi

ng s

peci

fic w

ork-

rela

ted

and

skill

s pr

ogra

mm

es

for

unem

ploy

ed le

arne

rs

that

cou

ld p

rogr

ess

on th

e N

QF

and

prov

ide

for

mob

ility

in

to e

mpl

oym

ent.

The

CH

IETA

cos

t-ce

iling

s w

ere

revi

ewed

resu

lting

in g

reat

er

parti

cipa

tion

by s

take

hold

ers.

Th

e im

pact

of t

he re

cent

DG

cy

cle

also

ass

iste

d w

ith th

e ac

cele

ratio

n to

war

ds e

xcee

ding

th

is ta

rget

.

Ente

red

prev

ious

fin

anci

al y

ear

4

Ente

red

curr

ent

finan

cial

yea

r1

2835

215

2.1.

13U

nem

ploy

ed

lear

ners

hips

cer

tified

475

496

276

199

248

1 21

9+7

4425

7%Ta

rget

exc

eede

d. T

his

indi

cato

r w

as a

chie

ved

and

exce

eded

th

roug

h th

e D

iscr

etion

ary

Gra

nts

Fund

ing

Mod

el. T

he

CHIE

TA c

ost-

ceili

ngs

wer

e re

view

ed m

otiva

ting

prov

ider

s an

d m

embe

r co

mpa

nies

to

par

ticip

ate.

Thi

s w

as a

pr

iori

tised

are

a fo

cusi

ng o

n th

e un

empl

oyed

.


◊ N

ote:

Tar

gets

ach

ieve

d an

d ex

ceed

ed a

re w

ithin

the

cont

ext o

f the

CH

IETA

Str

ateg

ic P

lan

and

pre-

dete

rmin

ed 2

012/

13 p

erfo

rman

ce

targ

ets

reco

mm

ende

d by

the

CHIE

TA A

ccou

nting

Aut

hori

ty a

nd a

ppro

ved

by th

e M

inis

ter

of H

ighe

r Ed

ucati

on a

nd T

rain

ing.

PRO

GRA

MM

E 2:

OCC

UPA

TIO

NA

LLY-

DIR

ECTE

D P

ROG

RAM

ME

(con

tinu

ed)


50

perf

orm

ance

Indi

cato

r20

12/1

3Ta

rget

Act

ual

Q1

Act

ual

Q2

Act

ual

Q3

Act

ual

Q4

tota

lVa

rian

ceSt

atus

2012

/13

Ach

ieve

dCo

mm

ents

2.1.

14U

nem

ploy

ed

burs

arie

s ce

rtifie

d40

56

033

44+4

110%

Targ

et e

xcee

ded.

A s

trat

egic

pr

ojec

t was

set

up

by

the

CHIE

TA e

ncou

ragi

ng

unem

ploy

ed y

oung

lear

ners

pu

rsui

ng C

hem

ical

-rel

ated

co

urse

s /

care

ers

with

in th

e Ch

emic

al S

ecto

r. In

the

rece

nt

enga

gem

ents

with

DH

ET, t

he

SETA

s w

ere

requ

este

d, g

iven

th

eir

affor

dabi

lity

fram

ewor

ks,

to fu

rthe

r st

reng

then

in

vest

men

t in

this

are

a. C

HIE

TA

subs

eque

ntly

resp

onde

d po

sitiv

ely

to th

is re

ques

t not

on

ly in

the

2012

/13

finan

cial

ye

ar b

ut a

lso

in o

ur A

nnua

l Pe

rfor

man

ce ta

rget

on

this

in

dica

tor

for

2013

/14.

2.1.

15

Une

mpl

oyed

in

tern

ship

s ce

rtifie

d38

00

047

47+9

124%

Targ

et e

xcee

ded.

Thi

s is

the

resu

lt of

the

prev

ious

yea

r’s

(201

1) p

artic

ipati

on in

this

pr

ogra

mm

e th

at le

d to

this

ac

hiev

emen

t.

The CHiETA’s Organisational PerformanceKE

YTa

rget

ach

ieve

d or

exc

eede

d as

per

com

men

ts c

olum

nN

o ta

rget

s se

t for

201

2/13

as

per

CHIE

TA S

trat

egic

Pla

n an

d A

PP 2

012/

13Su

bsta

ntial

mov

emen

t on

actu

al a

chie

vem

ent,

but

mar

gina

lly b

ehin

d an

nual

targ

et

◊ N

ote:

Tar

gets

ach

ieve

d an

d ex

ceed

ed a

re w

ithin

the

cont

ext o

f the

CH

IETA

Str

ateg

ic P

lan

and

pre-

dete

rmin

ed 2

012/

13 p

erfo

rman

ce

targ

ets

reco

mm

ende

d by

the

CHIE

TA A

ccou

nting

Aut

hori

ty a

nd a

ppro

ved

by th

e M

inis

ter

of H

ighe

r Ed

ucati

on a

nd T

rain

ing.

PRO

GRA

MM

E 2:

OCC

UPA

TIO

NA

LLY-

DIR

ECTE

D P

ROG

RAM

ME

(con

tinu

ed)


51

perf

orm

ance

Indi

cato

r20

12/1

3Ta

rget

Act

ual

Q1

Act

ual

Q2

Act

ual

Q3

Act

ual

Q4

tota

lVa

rian

ceSt

atus

2012

/13

Ach

ieve

dCo

mm

ents

2.1.

16U

nem

ploy

ed s

kills

pr

ogra

mm

es c

ertifi

ed14

011

028

190

229

+89

164%

Targ

et e

xcee

ded.

The

pos

itive

re

spon

se fr

om m

embe

r co

mpa

nies

’ im

plem

enta

tion

and

proj

ect m

anag

emen

t w

ithin

the

time

fram

es o

f va

riou

s sk

ills

prog

ram

me

proj

ects

resu

lted

in p

ositi

ve

com

pleti

on a

nd c

ertifi

catio

n.

2.1.

17Em

ploy

ed a

rtisa

ns

ente

red

650

189

9411

725

065

00

100%

Targ

et a

chie

ved.

2.1.

18Em

ploy

ed a

rtisa

ns

certi

fied

163

3348

2858

167

+410

2%Ta

rget

exc

eede

d. T

he C

HIE

TA’S

im

plem

enta

tion

of A

rtisa

n D

evel

opm

ent h

as a

lway

s be

en

an a

rea

of p

rior

ity a

nd th

e co

nsis

tent

impl

emen

tatio

n of

th

is p

rogr

amm

e ha

s re

sulte

d in

th

is a

chie

vem

ent.

2.1.

19U

nem

ploy

ed a

rtisa

ns

ente

red

972

1 00

8+3

610

4%Ta

rget

exc

eede

d. T

he

Dis

creti

onar

y G

rant

s Fu

ndin

g M

odel

pri

oriti

sed

this

pr

ogra

mm

e an

d th

e co

st-

ceili

ngs’

revi

ew e

ncou

rage

d m

embe

r co

mpa

nies

to

parti

cipa

te.

Ente

red

prev

ious

fin

anci

al y

ear

320

Ente

red

curr

ent

finan

cial

yea

r15

024

811

317

7

2.1.

20U

nem

ploy

ed a

rtisa

ns

certi

fied

243

7683

2271

252

+910

4%Ta

rget

exc

eede

d. T

he

Dis

creti

onar

y G

rant

s Fu

ndin

g M

odel

pri

oriti

sed

this

pr

ogra

mm

e an

d th

e co

st-

ceili

ngs’

revi

ew e

ncou

rage

d m

embe

r co

mpa

nies

to

parti

cipa

te.

2.1.

21Ba

selin

e7

031

2 54

32

015

1 43

93

236

9 23

32

202

131%

Base

line

targ

et e

xcee

ded.


◊ N

ote:

Tar

gets

ach

ieve

d an

d ex

ceed

ed a

re w

ithin

the

cont

ext o

f the

CH

IETA

Str

ateg

ic P

lan

and

pre-

dete

rmin

ed 2

012/

13 p

erfo

rman

ce

targ

ets

reco

mm

ende

d by

the

CHIE

TA A

ccou

nting

Aut

hori

ty a

nd a

ppro

ved

by th

e M

inis

ter

of H

ighe

r Ed

ucati

on a

nd T

rain

ing.

PRO

GRA

MM

E 2:

OCC

UPA

TIO

NA

LLY-

DIR

ECTE

D P

ROG

RAM

ME

(con

tinu

ed)


52

PRO

GRA

MM

E 3:

FET

CO

LLEG

E PR

OG

RAM

ME

perf

orm

ance

Indi

cato

r20

12/1

3Ta

rget

Act

ual

Q1

Act

ual

Q2

Act

ual

Q3

Act

ual

Q4

tota

lVa

rian

ceSt

atus

2012

/13

Ach

ieve

dCo

mm

ents

3.1.

1N

umbe

r of

wor

kpla

ce

expe

rien

tial l

earn

ing

ente

red

300

00

030

030

00

100%

Targ

et a

chie

ved.

3.1.

2N

umbe

r o

f w

orkp

lace

ex

peri

entia

l lea

rnin

g co

mpl

eted

150

00

714

315

00

100%

Targ

et a

chie

ved.

3.1.

3N

umbe

r of

FET

Co

llege

par

tner

ship

s18

00

811

19+1

106%

Targ

et e

xcee

ded.

The

CH

IETA

re

spon

ded

to a

Dis

creti

onar

y G

rant

app

licati

on in

par

tner

ship

w

ith a

Hig

her

Educ

ation

In

stitu

tion,

Pub

lic F

ET C

olle

ges

and

cam

puse

s re

sulte

d in

this

ac

hiev

emen

t.

3.1.

4

SETA

pre

senc

e at

FET

Co

llege

s1

01

00

10

100%

Targ

et a

chie

ved.

The

CH

IETA

is

the

host

SET

A in

Mpu

mal

anga

an

d ha

s op

ened

offi

ces

in

Ehla

nzen

i. Th

is w

as th

e m

anda

te o

f the

DH

ET.

3.1.

5Ba

selin

e46

90

115

454

470

+110

0%Ba

selin

e ta

rget

ach

ieve

d.


KEY

Targ

et a

chie

ved

or e

xcee

ded

as p

er c

omm

ents

col

umn

No

targ

ets

set f

or 2

012/

13 a

s pe

r CH

IETA

Str

ateg

ic P

lan

and

APP

201

2/13

Subs

tanti

al m

ovem

ent o

n ac

tual

ach

ieve

men

t, b

ut m

argi

nally

beh

ind

annu

al ta

rget

◊ N

ote:

Tar

gets

ach

ieve

d an

d ex

ceed

ed a

re w

ithin

the

cont

ext o

f the

CH

IETA

Str

ateg

ic P

lan

and

pre-

dete

rmin

ed 2

012/

13 p

erfo

rman

ce

targ

ets

reco

mm

ende

d by

the

CHIE

TA A

ccou

nting

Aut

hori

ty a

nd a

ppro

ved

by th

e M

inis

ter

of H

ighe

r Ed

ucati

on a

nd T

rain

ing.


53

PRO

GRA

MM

E 4:

LO

W-L

EVEL

YO

UTH

AN

D A

DU

LT L

AN

GU

AG

E A

ND

NU

MER

ACY

SKI

LLS

perf

orm

ance

Indi

cato

r20

12/1

3Ta

rget

Act

ual

Q1

Act

ual

Q2

Act

ual

Q3

Act

ual

Q4

tota

lVa

rian

ceSt

atus

2012

/13

Ach

ieve

dCo

mm

ents

4.1.

1N

umbe

r of

lear

ners

in

ABE

T/A

ET e

nter

ed12

50

00

130

130

+510

4%Ta

rget

exc

eede

d. T

his

was

a

focu

s ar

ea in

the

CHIE

TA

Dis

creti

onar

y G

rant

s Fu

ndin

g M

odel

and

the

CHIE

TA S

trat

egic

Pl

an th

at re

sulte

d in

pos

itive

pa

rtici

patio

n an

d ac

hiev

emen

t fr

om C

HIE

TA s

take

hold

ers.

4.1.

2N

umbe

r of

lear

ners

in

ABE

T/A

ET c

ertifi

ed62

00

064

64+2

103%

Targ

et e

xcee

ded.

Thi

s w

as

a fo

cus

area

in th

e CH

IETA

D

iscr

etion

ary

Gra

nts

Fund

ing

Mod

el a

nd th

e CH

IETA

Str

ateg

ic

Plan

that

resu

lted

in p

ositi

ve

parti

cipa

tion

and

achi

evem

ent

from

CH

IETA

sta

keho

lder

s.4.

1.3

Base

line

187

00

019

419

4+7

104%

Base

line

targ

et e

xcee

ded.


◊ N

ote:

Tar

gets

ach

ieve

d an

d ex

ceed

ed a

re w

ithin

the

cont

ext o

f the

CH

IETA

Str

ateg

ic P

lan

and

pre-

dete

rmin

ed 2

012/

13 p

erfo

rman

ce

targ

ets

reco

mm

ende

d by

the

CHIE

TA A

ccou

nting

Aut

hori

ty a

nd a

ppro

ved

by th

e M

inis

ter

of H

ighe

r Ed

ucati

on a

nd T

rain

ing.


54

PRO

GRA

MM

E 5:

WO

RKPL

ACE

-BA

SED

SKI

LLS

DEV

ELO

PMEN

T

perf

orm

ance

Indi

cato

r20

12/1

3Ta

rget

Act

ual

Q1

Act

ual

Q2

Act

ual

Q3

Act

ual

Q4

tota

lVa

rian

ceSt

atus

2012

/13

Ach

ieve

dCo

mm

ents

5.1.

1

Num

ber

of le

arne

rs

ente

red

wor

kpla

ce-

base

d sk

ills

deve

lopm

ent

1 15

00

365

362

387

1 11

4-3

697

%Th

is in

dica

tor

was

fund

ed

thro

ugh

the

Dis

creti

onar

y G

rant

s Fu

ndin

g M

odel

in

whi

ch m

embe

r co

mpa

nies

pa

rtici

pate

d.

5.1.

2

Num

ber

of

lear

ners

com

plet

ed

wor

kpla

ce-b

ased

sk

ills

deve

lopm

ent

575

168

150

187

167

672

+97

117%

This

indi

cato

r w

as e

xcee

ded

thro

ugh

the

Dis

creti

onar

y G

rant

s Fu

ndin

g M

odel

in

whi

ch m

embe

r co

mpa

nies

pa

rtici

pate

d.5.

1.3

Man

dato

ry G

rant

s pa

id to

larg

e fir

ms

101

08

8615

109

+810

8%Th

e CH

IETA

em

bark

ed o

n ex

tens

ive

regi

onal

ski

lls fo

rum

s,

road

sho

ws

and

natio

nal

inte

rven

tions

to e

ncou

rage

m

embe

r co

mpa

nies

to

parti

cipa

te. T

he o

nlin

e pr

oces

s of

the

subm

issi

on o

f WSP

s an

d AT

Rs e

ncou

rage

d m

embe

r co

mpa

nies

to p

artic

ipat

e an

d yi

elde

d po

sitiv

e re

sults

.5.

1.4

Man

dato

ry G

rant

s pa

id to

med

ium

firm

s84

010

103

1512

8+4

415

2%Th

e CH

IETA

em

bark

ed o

n ex

tens

ive

regi

onal

ski

lls fo

rum

s,

road

sho

ws

and

natio

nal

inte

rven

tions

to e

ncou

rage

m

embe

r co

mpa

nies

to

parti

cipa

te. T

he o

nlin

e pr

oces

s of

the

subm

issi

on o

f WSP

s an

d AT

Rs e

ncou

rage

d m

embe

r co

mpa

nies

to p

artic

ipat

e an

d yi

elde

d po

sitiv

e re

sults

.


KEY

Targ

et a

chie

ved

or e

xcee

ded

as p

er c

omm

ents

col

umn

No

targ

ets

set f

or 2

012/

13 a

s pe

r CH

IETA

Str

ateg

ic P

lan

and

APP

201

2/13

Subs

tanti

al m

ovem

ent o

n ac

tual

ach

ieve

men

t, b

ut m

argi

nally

beh

ind

annu

al ta

rget

◊ N

ote:

Tar

gets

ach

ieve

d an

d ex

ceed

ed a

re w

ithin

the

cont

ext o

f the

CH

IETA

Str

ateg

ic P

lan

and

pre-

dete

rmin

ed 2

012/

13 p

erfo

rman

ce

targ

ets

reco

mm

ende

d by

the

CHIE

TA A

ccou

nting

Aut

hori

ty a

nd a

ppro

ved

by th

e M

inis

ter

of H

ighe

r Ed

ucati

on a

nd T

rain

ing.


55

perf

orm

ance

Indi

cato

r20

12/1

3Ta

rget

Act

ual

Q1

Act

ual

Q2

Act

ual

Q3

Act

ual

Q4

tota

lVa

rian

ceSt

atus

2012

/13

Ach

ieve

dCo

mm

ents

5.1.

5M

anda

tory

Gra

nts

paid

to s

mal

l firm

s20

00

2022

951

300

+100

150%

The

CHIE

TA e

mba

rked

on

exte

nsiv

e re

gion

al s

kills

foru

ms,

ro

ad s

how

s an

d na

tiona

l in

terv

entio

ns to

enc

oura

ge

mem

ber

com

pani

es to

pa

rtici

pate

. The

onl

ine

proc

ess

of th

e su

bmis

sion

of W

SPs

and

ATRs

enc

oura

ged

mem

ber

com

pani

es to

par

ticip

ate

and

yiel

ded

posi

tive

resu

lts.

5.1.

6Ba

selin

e2

110

445

338

955

582

2 32

0+2

1011

0%Ba

selin

e ta

rget

exc

eede

d.


PRO

GRA

MM

E 5:

WO

RKPL

ACE

-BA

SED

SKI

LLS

DEV

ELO

PMEN

T (c

onti

nued

)

◊ N

ote:

Tar

gets

ach

ieve

d an

d ex

ceed

ed a

re w

ithin

the

cont

ext o

f the

CH

IETA

Str

ateg

ic P

lan

and

pre-

dete

rmin

ed 2

012/

13 p

erfo

rman

ce

targ

ets

reco

mm

ende

d by

the

CHIE

TA A

ccou

nting

Aut

hori

ty a

nd a

ppro

ved

by th

e M

inis

ter

of H

ighe

r Ed

ucati

on a

nd T

rain

ing.


56

PRO

GRA

MM

E 6:

SU

PPO

RT T

O C

O-O

PS, S

MA

LL E

NTE

RPRI

SES,

NG

Os,

CBO

s, C

BCs

AN

D W

ORK

ER-IN

ITIA

TED

/

COM

MU

NIT

Y TR

AIN

ING

INIT

IATI

VES

perf

orm

ance

Indi

cato

r20

12/1

3Ta

rget

Act

ual

Q1

Act

ual

Q2

Act

ual

Q3

Act

ual

Q4

tota

lVa

rian

ceSt

atus

2012

/13

Ach

ieve

dCo

mm

ents

6.1.

1N

umbe

r of

co

-ops

sup

port

ed25

00

890

89+6

435

6%Ta

rget

exc

eede

d. T

his

was

a

prio

ritis

ed R

ural

Fun

ding

Mod

el

that

enc

oura

ged

co-o

ps to

pa

rtici

pate

. Thi

s pr

ogra

mm

e w

as a

lso

impl

emen

ted

with

in

the

fram

ewor

k of

the

actu

al

outc

omes

of o

ne o

f the

NSD

S III

st

rate

gic

goal

s.

6.1.

2N

umbe

r o

f sm

all

busi

ness

sup

port

ed80

00

870

87+7

109%

Targ

et e

xcee

ded.

The

D

iscr

etion

ary

Gra

nts

Fund

ing

Mod

el e

ncou

rage

d es

peci

ally

sm

all b

usin

esse

s to

par

ticip

ate

resu

lting

in e

xcee

ding

the

targ

et.

6.1.

3\4

\5N

umbe

r of

NG

Os,

CB

Os

and

CBCs

su

ppor

ted

90

042

042

+33

467%

Targ

et e

xcee

ded.

The

D

iscr

etion

ary

Gra

nts

Fund

ing

Mod

el e

ncou

rage

d pa

rtici

patio

n in

this

are

a re

sulti

ng in

exc

eedi

ng th

e ta

rget

.6.

1.6

Base

line

114

00

218

021

8+1

0419

1%Ba

selin

e ta

rget

exc

eede

d.

The CHiETA’s Organisational PerformanceKE

YTa

rget

ach

ieve

d or

exc

eede

d as

per

com

men

ts c

olum

nN

o ta

rget

s se

t for

201

2/13

as

per

CHIE

TA S

trat

egic

Pla

n an

d A

PP 2

012/

13Su

bsta

ntial

mov

emen

t on

actu

al a

chie

vem

ent,

but

mar

gina

lly b

ehin

d an

nual

targ

et

◊ N

ote:

Tar

gets

ach

ieve

d an

d ex

ceed

ed a

re w

ithin

the

cont

ext o

f the

CH

IETA

Str

ateg

ic P

lan

and

pre-

dete

rmin

ed 2

012/

13 p

erfo

rman

ce

targ

ets

reco

mm

ende

d by

the

CHIE

TA A

ccou

nting

Aut

hori

ty a

nd a

ppro

ved

by th

e M

inis

ter

of H

ighe

r Ed

ucati

on a

nd T

rain

ing.


57

The CHiETA’s Organisational PerformancePR

OG

RAM

ME

7: A

DM

INIS

TRAT

ION

AN

D P

UBL

IC S

ECTO

R CA

PACI

TY

perf

orm

ance

Indi

cato

r20

12/1

3Ta

rget

Act

ual

Q1

Act

ual

Q2

Act

ual

Q3

Act

ual

Q4

tota

lVa

rian

ceSt

atus

2012

/13

Ach

ieve

dCo

mm

ents

7.1.

1N

umbe

r o

f ISO

Es

iden

tified

and

su

ppor

ted

20

20

02

010

0%Ta

rget

ach

ieve

d.

7.1.

2Ba

selin

e2

02

00

20

100%

Base

line

targ

et a

chie

ved.

PRO

GRA

M 8

: CA

REER

AN

D V

OCA

TIO

NA

L G

UID

AN

CE

perf

orm

ance

Indi

cato

r20

12/1

3Ta

rget

Act

ual

Q1

Act

ual

Q2

Act

ual

Q3

Act

ual

Q4

tota

lVa

rian

ceSt

atus

2012

/13

Ach

ieve

dCo

mm

ents

8.1.

1N

umbe

r of

le

arne

rs

rece

ivin

g ca

reer

gu

idan

ce

500

00

832

083

2+3

3216

6%Ta

rget

exc

eede

d. T

his

was

als

o on

e of

the

pri

oriti

sed

fund

ing

area

s w

ithin

the

Dis

creti

onar

y G

rant

s Fu

ndin

g Pr

ogra

mm

e an

d sp

ecifi

c att

entio

n w

as g

iven

to

Mat

hs a

nd S

cien

ce C

aree

r G

uida

nce

Prog

ram

mes

w

ith

posi

tive

upta

ke

and

feed

back

fr

om s

take

hold

ers.

8.1.

3Ba

selin

e50

00

083

20

832

+332

166%

Base

line

targ

et e

xcee

ded.

◊ N

ote:

Tar

gets

ach

ieve

d an

d ex

ceed

ed a

re w

ithin

the

cont

ext o

f the

CH

IETA

Str

ateg

ic P

lan

and

pre-

dete

rmin

ed 2

012/

13 p

erfo

rman

ce

targ

ets

reco

mm

ende

d by

the

CHIE

TA A

ccou

nting

Aut

hori

ty a

nd a

ppro

ved

by th

e M

inis

ter

of H

ighe

r Ed

ucati

on a

nd T

rain

ing.


58

PRO

GRA

MM

E 9:

MED

IUM

-TER

M S

TRAT

EGIC

PRI

ORI

TIES

perf

orm

ance

Indi

cato

r20

12/1

3Ta

rget

Act

ual

Q1

Act

ual

Q2

Act

ual

Q3

Act

ual

Q4

tota

lVa

rian

ceSt

atus

2012

/13

Ach

ieve

dCo

mm

ents

9.1.

1N

umbe

r of

pro

ject

s in

sup

port

of

Gov

ernm

ent’s

m

ediu

m-t

erm

pr

iori

ties

40

30

36

+215

0%Ta

rget

exc

eede

d. T

his

was

al

so a

pri

oriti

sed

fund

ing

prog

ram

me

thro

ugh

the

Dis

creti

onar

y G

rant

s th

at

enco

urag

ed a

nd re

sulte

d in

m

any

mem

ber

com

pani

es

and

prov

ider

s pa

rtici

patin

g po

sitiv

ely

in th

is in

terv

entio

n.9.

1.2

Base

line

40

30

36

+215

0%Ba

selin

e ta

rget

exc

eede

d.

PRO

GRA

MM

E 10

: MIN

ISTE

R O

F H

ET’S

SER

VIC

E-LE

VEL

AG

REEM

ENT

WIT

H P

RESI

DEN

T SA

perf

orm

ance

Indi

cato

r20

12/1

3Ta

rget

Act

ual

Q1

Act

ual

Q2

Act

ual

Q3

Act

ual

Q4

tota

lVa

rian

ceSt

atus

2012

/13

Ach

ieve

dCo

mm

ents

10.1

.1N

umbe

r of

lear

ners

as

sist

ed w

ith m

atri

c to

obt

ain

univ

ersi

ty

entr

ance

(RPL

)

500

00

100

100

+50

200%

Targ

et e

xcee

ded.

Thi

s pr

ogra

mm

e w

as p

rior

itise

d th

roug

h th

e D

iscr

etion

ary

Gra

nts

Fund

ing

Mod

el in

20

12/1

3 an

d en

cour

aged

m

embe

r co

mpa

nies

to

parti

cipa

te.


KEY

Targ

et a

chie

ved

or e

xcee

ded

as p

er c

omm

ents

col

umn

No

targ

ets

set f

or 2

012/

13 a

s pe

r CH

IETA

Str

ateg

ic P

lan

and

APP

201

2/13

Subs

tanti

al m

ovem

ent o

n ac

tual

ach

ieve

men

t, b

ut m

argi

nally

beh

ind

annu

al ta

rget

◊ N

ote:

Tar

gets

ach

ieve

d an

d ex

ceed

ed a

re w

ithin

the

cont

ext o

f the

CH

IETA

Str

ateg

ic P

lan

and

pre-

dete

rmin

ed 2

012/

13 p

erfo

rman

ce

targ

ets

reco

mm

ende

d by

the

CHIE

TA A

ccou

nting

Aut

hori

ty a

nd a

ppro

ved

by th

e M

inis

ter

of H

ighe

r Ed

ucati

on a

nd T

rain

ing.


59

perf

orm

ance

Indi

cato

r20

12/1

3Ta

rget

Act

ual

Q1

Act

ual

Q2

Act

ual

Q3

Act

ual

Q4

tota

lVa

rian

ceSt

atus

2012

/13

Ach

ieve

dCo

mm

ents

10.1

.2In

crea

se g

radu

ate

outp

ut in

Eng

inee

ring

Sc

ienc

es

500

00

8282

+32

164%

Targ

et e

xcee

ded.

Thi

s pr

ogra

mm

e w

as p

rior

itise

d th

roug

h th

e D

iscr

etion

ary

Gra

nts

Fund

ing

Mod

el in

20

12/1

3 an

d en

cour

aged

m

embe

r co

mpa

nies

to

parti

cipa

te. I

t was

als

o su

ppor

ted

as a

Str

ateg

ic

Proj

ect s

uppo

rting

une

mpl

oyed

le

arne

rs.

10.1

.3In

crea

se g

radu

ate

outp

ut in

Nat

ural

Sc

ienc

es

500

00

5050

010

0%Ta

rget

ach

ieve

d.

10.1

.4In

crea

se g

radu

ate

outp

ut in

Tea

cher

Ed

ucati

on

500

00

5050

010

0%Ta

rget

ach

ieve

d.

10.1

.5In

crea

se o

utpu

t of

Hon

ours

gra

duat

es

100

00

1717

+717

0%Ta

rget

exc

eede

d. T

his

prog

ram

me

was

pri

oriti

sed

thro

ugh

the

Dis

creti

onar

y G

rant

s Fu

ndin

g M

odel

in

2012

/13

and

enco

urag

ed

mem

ber

com

pani

es to

pa

rtici

pate

. It

was

als

o su

ppor

ted

as a

Str

ateg

ic

Proj

ect s

uppo

rting

une

mpl

oyed

le

arne

rs.

10.1

.6In

crea

se o

utpu

t of

Mas

ters

gra

duat

es10

00

012

12+2

120%

Targ

et e

xcee

ded.

Thi

s pr

ogra

mm

e w

as p

rior

itise

d th

roug

h th

e D

iscr

etion

ary

Gra

nts

Fund

ing

Mod

el in

20

12/1

3 an

d en

cour

aged

m

embe

r co

mpa

nies

to

parti

cipa

te.

10.1

.7In

crea

se o

utpu

t of

Doc

tora

l gra

duat

es5

00

05

50

100%

Targ

et a

chie

ved.


PRO

GRA

MM

E 10

: MIN

ISTE

R O

F H

ET’S

SER

VIC

E-LE

VEL

AG

REEM

ENT

WIT

H P

RESI

DEN

T SA

(con

tinu

ed)


60


perf

orm

ance

Indi

cato

r20

12/1

3Ta

rget

Act

ual

Q1

Act

ual

Q2

Act

ual

Q3

Act

ual

Q4

tota

lVa

rian

ceSt

atus

2012

/13

Ach

ieve

dCo

mm

ents

10.1

.8In

crea

se o

utpu

t of

Post

Doc

tora

tes

50

00

55

010

0%Ta

rget

ach

ieve

d.

10.1

.9Su

ppor

t Ind

ustr

y an

d U

nive

rsity

pa

rtne

rshi

ps

30

08

08

+526

7%Ta

rget

exc

eede

d. T

his

prog

ram

me

was

pri

oriti

sed

thro

ugh

the

Dis

creti

onar

y G

rant

s Fu

ndin

g M

odel

in

2012

/13

and

enco

urag

ed

mem

ber

com

pani

es to

pa

rtici

pate

. 10

.1.1

0Ba

selin

e23

30

08

321

329

+96

141%

Base

line

targ

et e

xcee

ded.

KEY

Targ

et a

chie

ved

or e

xcee

ded

as p

er c

omm

ents

col

umn

No

targ

ets

set f

or 2

012/

13 a

s pe

r CH

IETA

Str

ateg

ic P

lan

and

APP

201

2/13

Subs

tanti

al m

ovem

ent o

n ac

tual

ach

ieve

men

t, b

ut m

argi

nally

beh

ind

annu

al ta

rget

PRO

GRA

MM

E 10

: MIN

ISTE

R O

F H

ET’S

SER

VIC

E-LE

VEL

AG

REEM

ENT

WIT

H P

RESI

DEN

T SA

(con

tinu

ed)

◊ N

ote:

Tar

gets

ach

ieve

d an

d ex

ceed

ed a

re w

ithin

the

cont

ext o

f the

CH

IETA

Str

ateg

ic P

lan

and

pre-

dete

rmin

ed 2

012/

13 p

erfo

rman

ce

targ

ets

reco

mm

ende

d by

the

CHIE

TA A

ccou

nting

Aut

hori

ty a

nd a

ppro

ved

by th

e M

inis

ter

of H

ighe

r Ed

ucati

on a

nd T

rain

ing.


61

FINANCE


62

Finance

Unqualified Audit Opinion:

The CHIETA obtained an unqualified audit opinion for the financial year ended March 2013. This achievement once again confirms the high levels of integrity of financial-management practices and accountability within the organisation.

Revenue:

The skills-development levy (SDL) income earned increased by 15.3% from R330.9 million for the year ended 31 March 2012 to R381.6 million for the year ended 31 March 2013. Total revenue earned increased by 13.9% from R353.4 million in the prior period to R402.3 million in the current financial year. The contribution of the return on invested funds to total revenue was R19.1 million, representing approximately 4.7% of total revenue.

Analysis of trends in skills-development levy income:

The skills-development levy income has increased substantially since inception. Total actual SDL income received for the year ended March 2013 was 851% above the SDL income for the year ended March 2001. (For the entire period since inception to date, SDL income has escalated by an annual equivalent average of approximately 25% − materially exceeding both inflation and estimated annual salary increment in the Chemical Sector each year.) Figure 1 shows the total Skills-Development Levy Income received by the CHIETA in each year since inception.

Another clean audit reflects commitment to sound financial principles

Farhad Motala Chief Financial Officer


63

Finance

Figure 1: Skills-Development Levy Income

Expenditure:

Administration expenses remained within the legislated 10% maximum allowed by the skills-development regulations. The CHIETA realised a saving of over R9.1 million in administration expenses for the financial year ended 31 March 2013. This amount, together with the total investment return of R19.1 million and unclaimed Mandatory Grants to the value of R23.1 million, were transferred to the discretionary reserve at year-end to be utilised for Discretionary Grants and approved strategic projects for sector-skills priorities.

Employer grants and project expenses increased by 35.9% during the financial year from R262.5 million in 2012 to R356.8 million for the year ended 31 March 2013. Expenses on Mandatory Grants represented 90% of the skills-development levy income received for the purposes of Mandatory Grants. Expenses on Discretionary Grants represented 95.6% of the funds that were earned or swept into the discretionary reserve. A total amount of R147.8 million was earned as Discretionary Grant levy income and R141.4 million was expensed in Discretionary Grants and projects during the period.

◊ Financial viability and going concern

Figure 2 shows administration income received against administration expenditure from 2001 to 2013. The CHIETA has sustained its level of operations within the 10% legislated administration provision in each year since inception, without compromising the achievement of its service-level agreement and performance targets. Savings in administration expenses from 2001 to 2013 of over R43 million was reallocated to discretionary reserves, and utilised in Discretionary Grants for Chemical Sector skills’ priorities. These savings are attributed to continuous development of expenditure control and procurement practices within the CHIETA as well as streamlined, effective and efficient human resource capacity.

YEAR


64

Figure 2 - Administration Income vs Expenditure

◊ Levy Grant Disbursement as per NSDS targets were exceeded over the entire period since inception.

The CHIETA has exceeded its NSDS targets for grant disbursement for each year since inception.

Figure 3 shows the total SDL income received for grants in each year since inception compared to the total grant and project expenses during this period. The CHIETA has achieved an average disbursement rate of over 91% for the entire period since inception. Figure 3 - SDL Income vs Employer Grants and Project Expenses

Funds, reserves and commitments:

The total funds available in the discretionary reserve increased by R6.4 million from R340.1 million at 31 March 2012 to R346.5 million at 31 March 2013. Of the R346.5 million in the discretionary reserve as at 31 March 2012, R340.4 million is committed to Discretionary Grant contractual obligations. This represents a level of commitment of over 98.2% of the total funds available in the discretionary reserve at 31 March 2013.

Finance

YEAR

YEAR


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Report of the Audit Committee

The report of the Audit Committee has been prepared in accordance with the Treasury Regulations for Public Entities 27.1.7 and 27.1.10 (b) and (c) issued in terms of the Public Finance Management Act 1 of 1999, as amended by Act 29 of 1999.

We are pleased to present our report for the financial year ended 31 March 2013.

Audit Committee members and attendance

The Audit Committee consists of the members listed hereunder, and is required to meet a minimum of four times per annum as per it’s approved terms of reference. During the current year seven meetings were held.

Summary of meetings attended per independent member:

name13 April

201222 May

20128 June2012

25 July2012

16 october2012

8 november2012

7 March2013

Mr JL Davis (Chairperson) � � � � � � �Adv F Mukaddam X � � � � � XMr M Kepadisa � � � � � � �Mr B Muir � � � � � � �Ms J Klaasen (Appointed 20 July 2012) n/a n/a n/a � � � �

Attended meeting �Apology X

Audit Committee responsibilities

The Audit Committee reports that it has adopted appropriate formal terms of reference as its Audit Committee Charter has regulated its affairs in compliance with this charter, as well as the recommendations of the King III Code of Corporate Governance, and has discharged all its responsibilities as contained therein.

The system of control within the CHIETA is designed to provide reasonable assurance that assets are safeguarded and that liabilities and working capital are properly managed in line with PFMA, and the protocol on corporate governance for public entities. This is achieved by means of the risk-management process, as well as the identification of corrective actions and suggested enhancements to the controls and processes.

From the various reports of the Internal Auditors, the Audit Report on the Annual Financial Statements and the management letter of the Auditor-General, we concluded that the existing control environment required improvement during the year under review in order to provide a reasonable assurance that the organisation’s goals and objectives are being achieved. However, we have, since the time of these reports, received independent confirmation that from the assurance providers that a number of these weaknesses have been rectified. Others, however, are still being attended to. The Audit Committee will monitor on a regular basis, management’s progress in resolving the remaining matters, as required in terms of the Audit Committee Charter.


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Evaluation of Financial Statements

The Audit Committee has:

◊ Reviewed and discussed the audited financial statements to be included in the annual report with the Auditor-General and the Accounting Authority;

◊ Reviewed the Auditor-General’s management report and management’s response thereto;◊ Reviewed adjustments resulting from the audit.

The Audit Committee concurs and accepts the Auditor-General’s conclusion on the annual financial statements, and is of the opinion that the audited annual financial statements be accepted and read together with the report of the Auditor- General.

JL DAVISChairperson of the Audit Committee

Report of the Audit Committee


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REPORT OF THE AUDITOR-GENERAL TO PARLIAMENT ON THE CHEMICAL INDUSTRIES EDUCATION AND TRAINING AUTHORITY

REPORT ON THE FINANCIAL STATEMENTS

Introduction

1. I have audited the financial statements of the Chemical Industries Education and Training Authority (CHIETA) set out on pages 70 to 110, which comprise the statement of financial position as at 31 March 2013, statement of financial performance, the statement of changes in net assets and the cash-flow statement for the year then ended, the notes, comprising a summary of significant accounting policies and other explanatory information.

Accounting authority’s responsibility for the financial statements

2. The accounting authority is responsible for the preparation and fair presentation of these financial statements in accordance with the South African Standards of Generally Recognised Accounting Practice (SA Standards of GRAP), the requirements of the Public Finance Management Act of South Africa, 1999 (Act No. 1 of 1999) (PFMA) and the Skills Development Act, 1998 (Act No. 97 of 1998) (SDA), and for such internal control as the accounting authority determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor-General’s responsibility

3. My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with the Public Audit Act of South Africa, 2004 (Act No. 25 of 2004) (PAA), the General notice issued in terms thereof and International Standards on Auditing. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

5. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

opinion

6. In my opinion, the financial statements present fairly, in all material respects, the financial position of the Chemical Industries Education and Training Authority as at 31 March 2013, and its financial performance and cash flows for the year then ended in accordance with SA Standards of GRAP and in the requirements of the PFMA and SDA.


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REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

7. In accordance with the PAA and the General notice issued in terms thereof, I report the following findings relevant to performance against predetermined objectives, compliance with laws and regulations and internal control, but not for the purpose of expressing an opinion.

Predetermined objectives

8. I performed procedures to obtain evidence about the usefulness and reliability of the information in the annual performance report as set out on pages 43 to 60 of the annual report.

9. The reported performance against predetermined objectives was evaluated against the overall criteria of usefulness and reliability. The usefulness of information in the annual performance report relates to whether it is presented in accordance with the National Treasury annual reporting principles and whether the reported performance is consistent with the planned objectives. The usefulness of information further relates to whether indicators and targets are measurable (i.e. well defined, verifiable, specific, measurable and time bound) and relevant as required by the national Treasury’s Framework for managing programme performance information (FMPPI).

The reliability of the information in respect of the selected objectives is assessed to determine whether it adequately reflects the facts (i.e. whether it is valid, accurate and complete).

10. There were no material findings on the annual performance report concerning the usefulness and reliability of the information.

Compliance with laws and regulations

11. I performed procedures to obtain evidence that the entity has complied with applicable laws and regulations regarding financial matters, financial management and other related matters. My findings on material non-compliance with specific matters in key applicable laws and regulations as set out in the General notice issued in terms of the PAA are as follows:

Annual financial statements

12. The financial statements submitted for auditing were not in all material respects prepared in accordance with the requirements of Section 55(1) of the PFMA. Material misstatements on Discretionary Grants reserve commitments identified by the auditors in the submitted financial statements were subsequently corrected.

Internal control

13. I considered internal control relevant to my audit of the financial statements, programme performance report and compliance with laws and regulations. The matters reported below under the fundamentals of internal control are limited to the significant deficiencies that resulted in the findings on compliance with laws and regulations included in this report.



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leadership

14. Adequate oversight was not always exercised regarding financial reporting and related internal controls.

Financial performance management

15. Although policies and procedures were in place, there were material adjustments to the financial statements with regard to the Discretionary Grants reserve commitments. This could be attributed to the fact that existing controls in respect to the monthly processing and reconciling of Discretionary Grants reserve commitments were not enhanced to ensure adequate, accurate and complete financial reporting.

Pretoria31 July 2013



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The Annual Financial Statements for the year ended 31 March 2013, set out on pages 70 to 110, have been approved by the Accounting Authority in terms of section 51(1) (f) of the Public Finance Management Act (PFMA), No 1 of 1999, as amended, on 29 May 2013, and are signed on their behalf by:

Ayesha Itzkin nolitha Fakude Acting Chief Executive Officer Chairperson of the Accounting Authority

Content Page

Report of the Accounting Authority ................................................................................................... 71-77

Statement of Financial Performance ........................................................................................................78

Statement of Financial Position ................................................................................................................79

Statement of Changes in Net Assets ........................................................................................................80

Cash Flow Statement ................................................................................................................................81

Statement of Comparison of Budget and Actual Amounts ......................................................................82

Accounting Policies to the Annual Financial Statements .................................................................... 83-91

Notes to the Annual Financial Statements ....................................................................................... 92-110

Annual Financial Statements for the year ended 31 March 2013


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Report of the Accounting Authority for the year ended 31 March 2013

29 May 2013

Report by the Accounting Authority to the Executive Authority / Provincial Legislature and Parliament of the Republic of South Africa

1. General review of the state of affairs

1.1 Income

During the period under review the Chemical Industries Education and Training Authority (CHIETA) realised an 15.3% increase in skills development levy income in comparison to the levy income earned for the year ended 31st March 2012. Return on invested funds accounted for R19.1 million of total revenue.

1.2 Expenses

CHIETA administration expenditure remained well within the 10% margin prescribed by the skills development regulations, and administration savings of over R9.1 million representing 19% of the total administration income was transferred to the discretionary reserve at 31st March 2013.

The CHIETA expensed over R356 million in employer grants and project expenses representing more than 107% of grant levy income received for the year of approximately R333 million for the financial year ended 31st March 2013.

1.2.1 discretionary Grants and commitments:

The CHIETA expensed over R141 million in discretionary grants and projects for the financial year, exceeding the prior year expense by 85%. During the financial year under review, management reviewed the entire discretionary grant policy framework, internal controls, processes and procedures, guidelines and funding models for discretionary grant allocations. The objective of the review was to ensure that a credible process was in place to ensure proper accountability within all levels of the organisation for the project management, optimal service delivery and disbursement of discretionary grants. Discretionary grant allocations and funding priorities were also interrogated, ranked and aligned against the priorities of the National Skills Development Strategy 3 (NSDS 3).

During the year under review, applications for discretionary grants were once again over subscribed. After evaluation according to the established criteria, awards of over R164 million was approved. The nature of initiatives supported included:

◊ Programs supporting learners on registered learnerships and workplace experience ◊ Supporting of scarce and critical skills◊ Honouring apprenticeship and artisan training commitments and prioritising new apprenticeship

programmes◊ Supporting partnerships and training initiatives in FET, HET and the chemical industry◊ Providing incentives for workplace experience and employment creation


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◊ Assisting graduates in entering the workplace and enhancing employability through further graduate development programs

◊ Promoting Recognition of prior learning (RPL) and facilitation of strategic research programs

It is the opinion of the accounting authority that the expenditure incurred during the year under review has been well accounted for and that the projects and programmes undertaken have considerably benefited the chemical industries sector as a whole.

As at 31 March 2013, total CHIETA commitments based on outstanding discretionary grant contractual obligations was at R340 million representing 98.2% of the total funds available in the discretionary reserve. This amount included an allocation of R164 million during the year to skills priorities as outlined in note 15.1 on page 101 and 102 of the annual financial statements.

1.2.3 Mandatory Grants

Mandatory Grant participation levels increased substantially on the new electronic on-line submission platform and exceeded anticipated participation projections during the financial period. The mandatory grant expense increased by 22% from R188 million in 2012 to R215 million for the financial year ended 31 March 2013.

2. Services rendered by the Public Entity and Tariff Policy

The CHIETA is a schedule 3A public entity enacted by the Minister of Higher Education and Training in terms of the Skills Development Act and governed by the Public Finance Management Act, Act No.1 of 1999, as amended. The CHIETA facilitates skills development in the chemicals sector. No tariff is charged for services rendered. The CHIETA is funded through skills development levies contributed in terms of the Skills Development Act by employers in the chemicals industries sector.

3. Capacity constraints

Whilst certain capacity constraints were experienced by the organisation for the year under review, these did not impact on the ultimate delivery by CHIETA to its stakeholders, nor was the achievement of our strategic objectives compromised.

4. Utilisation of donor funds

No donor funds were received or expended by the CHIETA for the year under review.



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5. Business address

2 Clamart Road, Richmond, Johannesburg 2193

6. Controlled entities and Public entities

The CHIETA does not exercise control over any other entities, agencies, organisations or public entities.

7. Other organisations to whom transfer payments have been made

No transfer payments were made by the CHIETA to any other party during the period under review.

8. Public private partnerships (PPP)

No public private partnerships were entered into during the period under review.

9. Discontinued Activities / Activities to be discontinued

No discontinued activities or closure of any major part of the business have occurred during the financial period.

10. New / proposed Activities

No new activities have been proposed.

11. Re-licensing

The CHIETA has been re-established for a five year period until 31 March 2016.

12. Corporate Governance

12.1 Corporate Governance and Compliance with the PFMA

The CHIETA has implemented the recommendations of the Public Finance Management Act (PFMA) and the King Report on Corporate Governance. The CHIETA audit committee met regularly during the financial year in order to perform, inter-alia the following:

◊ the oversight role over the internal audit function ◊ review of CHIETA financial statements and management accounts◊ assessment and review of a fraud prevention plan and code of ethics, ◊ annual independent review and update of policies, procedures and PFMA compliance by the internal

and external audit function



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◊ annual risk assessment and update◊ tracking of and implementation of internal audit recommendations by audit committee and governance

structures◊ consideration of governance and legal compliance with protocols and controls

12.2 Financial Risk Management and systems of control

Section 38(a) of the PFMA requires the accounting authority of a public entity to implement and maintain effective, efficient and transparent systems of financial, risk management and internal controls. The CHIETA has developed detailed financial policies and procedures, and a quality management system to guide internal processes. The CHIETA has implemented various measures to ensure that public funds are managed as required by the PFMA, treasury regulations other applicable acts and regulations and internal and external auditors conduct regular compliance reviews.

The CHIETA Governing Board committed CHIETA to a process of sustained risk management that is aligned to the principles of good corporate governance, relevant legislation and leading practice. Accountability is strongly vested at Governing Board and managerial level on strategic and operational risk management.

The CHIETA has over the last few years embarked upon a comprehensive organisation wide risk management process that was done in a structured, consistent and integrated manner that aligns strategy, processes, people, technology and knowledge towards mitigating risks within acceptable levels. This Chieta Risk Management Framework covers the full spectrum of risks taken in the pursuance of CHIETA objectives and are categorized into strategic and operational risks per the respective functional areas and business processes of the organisation.

Management and monitoring of the CHIETA Risk Management framework are facilitated through regular risk assessments and reporting by management into the Governance structures of CHIETA in terms of relevance, progress and status of risks treatments as per committed deadlines and implementation frameworks.

12.3 Expenditure Control and Procurement Framework

The CHIETA has developed a robust framework for expenditure control, governed by various policies, procedures, delegations and systems, which are updated on a regular basis. A supply chain management policy framework is fully implemented in line with the preferential procurement practice framework act and supply chain management regulations. These policies and procedures are reviewed regularly by the CHIETA management, staff, and internal auditors and adjusted to ensure that current updates in procurement practices are adhered to by the entity.



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12.4 CHIETA Infrastructure and Security over assets and income

The CHIETA net asset base was approximately R352 million at 31 March 2013. Total net assets increased by R6.4 million as at the financial year ended 31 March 2013.

12.5 Governing Board and Executive Committee Meetings

Governing board members attend quarterly meetings and discuss strategic matters focusing on delivery of the CHIETA mandate.

12.6 Promotion of Accountability and Transparency

12.6.1 Audit Committee

The Audit Committee functions in terms of section 47 of the PFMA and performs a critical governance function. As with the board, its constitutional structure and operation have been considered in relation to best practice recommendations in terms of the King Report and the protocols on corporate governance.

12.6.2 Management Committee

Through involvement with day-to-day business activities, the CHIETA Chief Executive Officer and the management team are responsible for ensuring that decisions, strategies and views of the board are implemented.

12.6.3 Employees

The Human Resources Strategy is founded on human capital development. It also addresses issues that create the conditions and opportunities for previously disadvantaged individuals to take their rightful place at all levels.

12.6.4 Employment Equity

There is continual monitoring and enforcement of employment equity practices..



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13. Remuneration to members of the Accounting Authority an Executive Management

Accounting Authority

Remuneration to members of the Accounting Authority 1 April 2012 to 31 March 2013

name Constituency

Governing Board

Meeting Fee

Committee Meeting

Fee

Once-off Board Fee 5%

Once-off Board Fee 8% total

1. Nolitha Fakude Chairperson - - - - -2. Manene Samela Ministerial Appointee 17 120 24 528 - 41 6493. Chemist Khumalo

(Passed away in 2012-13)

Ministerial Appointee

4 824 - - - 4 8244. Merwe van Pletsen

(Resigned during 2012-13) 2 070 928 - - 2 998

5. Bertie van Baalen NBCEA - - - - -6. Jan Smit NASCEA 21 060 12 128 39 246 72 4337. Tshepo Naka

(Appointed in 2012-13)

Glass

- - - - -8. Jacqui Klaasen

(OMNIA)Explosives and Fertilisers 14 512 15 561 - - 30 073

9. Brian Muir UASA 17 120 11 701 39 246 68 06710. Gerhard Ceronie Solidarity 18 270 14 125 39 246 71 64011. Mosehla Mampho SACWU 18 954 22 801 39 246 81 00012. Dan Nkotsoe GIWUSA 15 672 7 993 39 246 62 91113. Simon Mofokeng

(Appointed in 2012-13)

CEPPWAWU

- - - - -14. George Mnguni DOE - - - - -15. Tshenge Demana DTI - - - - -16. Mike Booth CAIA 8 582 20 461 - 39 245 68 28917. Ingrid Dimo NBCCI 16 034 34 991 - 39 246 90 271

totAl 154 218 140 689 24 528 274 720 594 156

Explanatory Notes to Accounting Authority Remuneration:

1. Some members of the Accounting Authority have elected not to receive any remuneration for their services based on the policy directives of their respective constituency.



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2. The remuneration level of Accounting Authority members is subject to the legislative and policy frameworks of government, affordability and a dedicated budget. This is based on the annual remuneration framework of Accounting Authority members as approved annually by the Minister of Finance and the Minister of Higher Education and Training.

3. The Accounting Authority meeting fee and Committee meeting fee are paid in accordance with the approved rate as per the treasury conversion key.

4. Over and above the above mentioned Accounting Authority and Committee meeting fees a once off fee is payable to compensate members for time spent on preparation, research and other relevant official duties as requested by the Accounting Authority.

5. Where a member serves only on the Accounting Authority or a single committee, a fee of 5% of the relevant annual remuneration in the applicable treasury conversion key is payable.

6. Where a member serves on the Accounting Authority and more than one committee, a fee of 8% of the relevant annual remuneration in the applicable treasury conversion key is payable.

Executive Management

Remuneration to members of Executive Management1 April 2012 to 31 March 2013

name Designation Basic Allowancesprovidend

Fundperformance

Bonus totalAyesha Itzkin Acting CEO/ETDQA

Executive 750 244 228 422 155 868 204 216 1 338 751Farhad Motala CFO 944 997 189 000 193 470 165 933 1 493 399Trevor Channing Governance & Risk

Executive 705 457 381 945 69 350 144 594 1 301 345Meryl Plasket Research Executive 492 002 5 250 - 32 321 529 574Thapelo Madibeng

Strategic Projects Executive 404 167 33 250 59 836 32 321 529 574

totAl 3 296 867 837 867 478 524 579 386 5 192 644

Chairperson of the CHIETA Accounting AuthorityDate: 29 May 2013



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Statement of Financial Performancefor the year ended 31 March 2013

2012/13 2011/12note R’000 R’000

NON-EXCHANGE REVENUESkills Development Levy: income 2 381 685 330 953 Skills Development Levy: penalties and interest 1 532 1 726 Other income 2 36

EXCHANGE REVENUEInvestment income 3 19 165 20 712

total revenue 1 402 384 353 427

EXPENSESEmployer grant and project expenses 4 (356 883) (262 584)Administration expenses 5 (39 058) (34 946)Loss on Disposal 6 (29) (159)

Total expenses (395 970) (297 689)

NET SURPLUS FOR THE YEAR 1 6 414 55 738


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Statement of Financial Positionfor the year ended 31 March 2013

2012/13 2011/12note R’000 R’000

ASSETS

Current assetsPrepayments and advances (Exchange) 8 49 84 Accounts receivable (Non-Exchange) 9 936 2 029 Cash and cash equivalents 10 428 779 369 596 Inventories 19 65 77

429 829 371 786

Non-current assetsProperty, plant and equipment 6 1 648 871 Other intangible assets 7 127 146

1 775 1 017

TOTAL ASSETS 431 604 372 803

Less: Current liabilitiesAccounts payable 11 78 933 26 546

- Non-Exchange 68 312 14 858 - Exchange 10 621 11 688

78 933 26 546

TOTAL NET ASSETS 352 671 346 257

FUNDS CONTRIBUTED BY:

Funds and reservesAdministration reserve 6 094 6 094 Discretionary reserve 346 577 340 163

TOTAL NET FUNDS 352 671 346 257


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Statement of Changes in Net Assetsfor the year ended 31 March 2013

Administration reserve

employer grant

reserveDiscretionary

reserve

net accumulated

surplus totalR’000 R’000 R’000 R’000 R’000

Balance at 31 March 2010 6 094 - 243 684 - 249 778

Net Surplus per Statement of Financial Performance - - - 40 741 40 741 Allocation of Net accumulated surplus 1 897 31 438 7 406 (40 741) - Excess reserves transferred to Discretionary reserve (1 897) (31 438) 33 335 - -

Balance at 31 March 2011 6 094 - 284 425 - 290 519

Net Surplus per Statement of Financial Performance - - - 55 738 55 738 Allocation of Net accumulated surplus 7 351 18 249 30 138 (55 738) - Excess reserves transferred to Discretionary reserve (7 351) (18 249) 25 600 - -

Balance at 31 March 2012 6 094 - 340 163 - 346 257

Net Surplus per Statement of Financial Performance - - - 6 414 6 414 Allocation of Net accumulated surplus 9 196 23 121 (25 903) (6 414) - Excess reserves transferred to Discretionary reserve (9 196) (23 121) 32 317 - -

Balance at 31 March 2013 6 094 - 346 577 - 352 671


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Cash Flow Statementfor the year ended 31 March 2013

2012/13 2011/12note R’000 R’000

CASH FLOWS FROM OPERATING ACTIVITIESOperating activities

Cash receipts from stakeholders 384 310 331 073 Levies, interest and penalties received 384 310 331 039 Other cash receipts from stakeholders - 34

Cash paid to stakeholders, suppliers and employees (342 830) (341 822)Grants and project payments (304 461) (307 010)Compensation of employees 5.1 (21 153) (17 891)Payments to suppliers and other (17 216) (16 921)

Cash genrated/(utilised) in operations 13 41 480 (10 749)Investment income 3 19 165 20 712

Net cash inflow from operating activities 60 645 9 963

CASH FLOW FROM INVESTING ACTIVITIESPurchase of property, plant and equipment 6 (1 464) (405)Proceeds from disposal of property, plant and equipment 2 2

Net cash outflow from investing activities (1 462) (403)

CASH FLOW FROM FINANCING ACTIVITIESGrants, transfers and funds received - (1 107)

Net cash inflow from financing activities - (1 107)

net increase in cash and cash equivalents 59 183 8 453 Cash and cash equivalents at beginning of year 10 369 596 361 143

Cash and cash equivalents at end of year 10 428 779 369 596


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noteApproved

Budget Actual

Favourable (Unfavourable)

VarianceApproved

Budget Actual

Favourable (Unfavourable)

Variance2012/13 2012/13 2012/13 2011/12 2011/12 2011/12

R’000 R’000 R’000 R’000 R’000 R’000NON-EXCHANGE REVENUE

Skills Development Levy: income 20.1 342 419 381 685 39 266 318 900 330 953 12 053 Skills Development Levy: penalties and interest 20.2 962 1 532 570 908 1 726 818 Other income - 2 2 - 36 36

EXCHANGE REVENUE - Investment income 20.3 15 839 19 165 3 326 16 673 20 712 4 039

total revenue 359 220 402 384 43 164 336 481 353 427 16 946

EXPENSESEmployer grant and project expenses 20.4 302 325 356 883 54 558 302 355 262 584 (39 771)Administration expenses 20.5 56 895 39 058 (17 837) 34 126 34 946 820 Loss on Disposal 20.6 - 29 29 - 159 159

Total expenses 359 220 395 970 36 750 336 481 297 689 (38 792)

NET SURPLUS FOR THE YEAR - 6 414 6 414 - 55 738 55 738


Statement of Comparision of Budget and Actual Amountsfor the year ended 31 March 2013


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Accounting Policy Notes to the Annual Financial Statements for the year ended 31 March 2013

1. ACCOUNTING POLICY

1.1 Basis of preparation

The financial statements have been prepared in accordance with the effective Standards of Generally Recognised Accounting Practices (GRAP) including any interpretations, guidelines and directives issued by the Accounting Standards Board.

1.2 The cash flow statement has been prepared in accordance with the direct method.

1.3 Specific information such as:

(a) receivables from non-exchange transactions, including taxes and transfers;(b) taxes and transfers payable; and(c) trade and other payables from non-exchange transactions must be presented separately on the

statement of financial position.

1.4 The amount and nature of any restrictions on cash balances is required to be disclosed.

The principal accounting policies adopted in the preparation of these financial statements are set out below and are, in all material respects, consistent with those of the previous year, except as otherwise stated.

1.5 The financial statements have been prepared on the historical cost basis, except where adjusted for present / fair values as required by the relevant accounting standard.

1.6 New Accounting Pronouncements

At the date of authorisation of these financial statements, there are Standards and Interpretations in issue but not yet effective. These include the following Standards and Interpretations that are applicable to the SETA and may have an impact on future financial statements.

Effective DateRelated party GRAP 20 Not yet Effective

An entity shall apply Standards of GRAP for Annual Financial Statements covering periods beginning on or after a date to be determined by the Minister of Finance in a regulation to be published in accordance with section 91(1)(b) of the PFMA.

GRAP 20 : Related Party

This standard prescribe the disclosure of information relevant to draw attention to the possibility that the Seta financial position and surplus/deficit may have been affected by the existence of related parties. It is not expected that this standard will significantly impact future disclosures.


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The following Standards and Interpretations that have been issued but are not yet affective are not applicable to the SETA and will not have an impact on future financial statements:

Effective date, commencing on or after Segment Reporting GRAP 18 Not yet EffectiveTransfer of Function between Entities Under Common Control

GRAP 105 Not yet Effective

Transfer of Function between Entities Not Under Common Control

GRAP 106 Not yet Effective

Mergers GRAP 107 Not yet Effective

1.7 Going Concern

The financial statements have been prepared on the going concern basis, as the CHIETA does not see any reason to significantly curtail its operations in then foreseeable future.

2.1 Currency These financial statements are presented in South African rands as this is the currency in which the entity’s

transactions are denominated. Figures have been rounded of to the nearest thousand (R’000).

3.1 Revenue recognition Skills Development Levy (SDL) transfers are recognised when it is probable that future economic benefit will

flow to the SETA and these benefits can be measured reliably. This occurs when the department of higher education and training (DHET), either makes an allocation or payment, whichever comes first, to the SETA, as required by section 8 of the Skills Development Levies Act, 1999 (Act No. 9 of 1999) Skills Development levies are recognised at the fair value of the consideration received

3.2 levy income In terms of section 3(1) and 3(4) of the Skills Development Levies Act, 1999 (Act No. 9 of 1999), registered member companies of the SETA pay a skills development levy of 1% of the total payroll cost to the South African Revenue Services (SARS). 80% of skills development levies are paid over to the SETA (net of the 20% contribution to the National Skills Fund).

Revenue is adjusted for inter-SETA transfers due to employers changing SETA’s. Such adjustments are disclosed separately as inter-SETA transfers. The amount of the inter-SETA adjustment is calculated according to the Standard Operating Procedures issued by the Department of Labour in June 2001. When a new employer is transferred to the SETA, the levies transferred by the former SETA are recognised as revenue and allocated to the respective category to maintain its original identity.

3.3 Interest and penalties Interest and penalties on the skills development levy is recognised on the accrual basis.

Accounting Policy notes to the Annual Financial Statements for the year ended 31 March 2013


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3.4 Funds allocated by the National Skills Authority for special projects

Funds transferred by the National Skills Authority are accounted for in the financial statements of the SETA as a liability until the related eligible special project expense are incurred, when the liability is extinguished and revenue recognised.

Property, plant and equipment acquired for the project are capitalised in the financial statements as the SETA controls such assets for the duration of the project. Such assets can however only be disposed of in terms of agreement and specific written instructions by the National Skills Authority.

3.5 Government grants and other donor income

Conditional government grants and other conditional donor funding received are recorded as deferred income when it becomes receivable and are then recognised as income on a systematic basis over the period necessary to match the grants with the related costs which it was intended to compensate. Unconditional grants received are recognised when the amounts have been received.

3.6 Investment income

Interest income is accrued on a time proportion basis, taking into account the principal amount outstanding and the effective interest rate over the period to maturity.

4.1 Grants and project expenditure A registered company may recover a maximum of 50% of its total levy payment by complying with the grant criteria in accordance with the Skills Development Regulations issued in terms of the Skills Development Act 1999 (Act No 9 of 1999). Mandatory grants The grant payable and the related expenditure are recognised when the employer has submitted an application for a grant in the prescribed form by 30 June 2012. The grant is equivalent to 50% of the total levies paid by the employer during the corresponding financial period for the skills planning grant and implementation grant. Discretionary grants and project expenditure The funding for discretionary grants and projects comprise 20% of the total levies paid by the employers, levy grants that are not claimed by employers, the surplus of administration levies not utilised, investment income, and other income generated by the SETA. A SETA may out of any surplus monies determine and allocate discretionary grants to employers, education and training providers and workers of the employers who have submitted an application for a discretionary grant in the prescribed form within the agreed upon cut-off period. Project expenditure comprise:

◊ costs that relate directly to the specific contract; ◊ costs that are attributable to contract activity in general and can be allocated to the project; and◊ such other costs as are specifically chargeable to the Seta under the terms of the contract.


86

Such costs are allocated using methods that are systematic and rational and are applied consistently to all costs having similar characteristics. Project costs are recognised as expenses in the period in which they are incurred. A receivable is recognised net of a provision for irrecoverable amounts for incentive and other payments made to the extent of expenses not yet incurred in terms of the contract.

5.1 Irregular and fruitless and wasteful expenditure Irregular expenditure means expenditure incurred in contravention of, or not in accordance with, a

requirement of any applicable legislation.

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

All irregular and fruitless and wasteful expenditure is charged against income in the period in which they are incurred.

6.1 Property, plant and equipment Property, Plant and equipment are stated at historical cost less accumulated depreciation and accumulated impairment. Depreciation is calculated on the straight-line method to write-off the cost of each asset over its estimated useful life.

◊ Computer equipment 50%◊ Office furniture and fittings 10%◊ Office equipment 10%

The depreciation charge is to depreciate the book value over the the useful life of the asset to its assessed residual value. Depreciation is calculated and provided for on an annual basis. If the residual value of an asset is at least equal to its carrying amount, depreciation will cease.

The expected useful life of assets within each class differs, since all of the assets are expected to be in use over the life of the SETA. The depreciation of assets commences on the date that the asset is available for use, even if it is not yet in use. The estimated useful life of the assets are limited to the remaining period of the licence issued to the CHIETA by the Minister of Higher Education and Training. For the current year the remaining period is 4 years (2011: 5 years). Useful life of assets are re-assessed at the end of each financial year. The following factors were considered to determine the useful life of the asset:

◊ Expected usage of the asset; ◊ Expected physical wear and tear of the asset; ◊ Technical obsolescence; and ◊ Legal or other limits on the use of the asset.



87


Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount (i.e. impairment losses are recognised).

Gains and losses on disposal of property, plant and equipment are determined by reference to their carrying amount and are taken into account in determining operating profit. Intangible Assets Intangible assets held for use are stated in the balance sheet at amortised cost ,being the initial cost price less any amortisation and impairment. Amortisation is charged so as to write off the cost of intangible assets over their estimated useful lives, using the straight-line method as following:

◊ Computer Software 50% The useful lives of intangible assets are reassessed at the end of each financial year.

7.1 Finance and operating lease agreements Leases of assets under which all the risks and benefits of ownership are effectively retained by the lessor are

classified as operating leases. Payments made under operating leases are charged to the income statement based on actual straight lined and accrued payments. When an operating lease is terminated before the lease period has expired, any payment required to be made to the lessor by way of penalty is recognised as an expense in the period in which termination take place.

8.1 Retirement benefit costs The SETA provides for retirement benefits for all its permanent employees through a defined contribution

scheme that is subject to the Pension Funds Act, 1956 as amended. In terms of the Pension Funds Act, the fund is not required to be actuarially valued. Contributions are at a rate of 14.88% of pensionable emoluments.

The SETA’s contribution to the defined contribution plans is charged to the income statement in the year to

which they relate and no future liability exists for the CHIETA.

9.1 provisions Provisions are recognised when the SETA has a present legal or constructive obligation as a result of past events, and it is probable that this will result in an outflow of economic benefits that can be estimated reliably.

9.2 Provision for employee entitlements The cost of other employee benefits is recognised during the period in which the employee renders the

related service. Employee entitlements are recognised when they accrue to employees. A provision is made for the estimated liability as a result of services rendered by employees up to the balance sheet date. Provisions included in the balance sheet are provisions for leave (based on the current salary rates), bonuses and termination benefits.


88

9.3 Provision for grants A provision is recognised for grant payments once the specific criteria set out in the regulations to the Skills

Development Act, 97 of 1998 has been complied with by member companies and it is probable that the SETA will approve the payment. The measurement of the obligation involves an estimate, based on the established pattern of past practice of approval for each type of grant.

No provision is made for projects approved at year-end, unless the service in terms of the contract has been

delivered or the contract is of an onerous nature. Where a project has been approved, but has not been accrued for or provided for, it is disclosed as commitments in the notes to the financial statements.

10.1 Financial instruments Recognition Financial assets and financial liabilities are recognised on the SETA’s balance sheet when the SETA becomes a

party to the contractual provisions of the instrument. Measurement Financial instruments are initially measured at cost, which includes transaction costs. Subsequent to initial

recognition these instruments are measured as set out below.

10.2 Financial assets The Seta’s principle financial assets are accounts and other receivable and cash and cash equivalents. Investments and loans The following categories of investments are measured at subsequent reporting dates at amortised cost by using the effective interest rate method if they have a fixed maturity, or at cost if there is no fixed maturity:

◊ Loans and receivables originated by the group;◊ Held-to-maturity investments; and◊ An investment that does not have a quoted market price in an active market and whose fair value

cannot be measured reliably. Cost and amortised cost are inclusive of any impairment loss recognised to reflect irrecoverable amounts. The financial assets are subject to review for impairment at each balance sheet date. Investments other than those listed above are classified as available-for-sale investments or investments held-for-trading and are measured at subsequent reporting dates at fair value without any deduction for transaction costs that may be incurred on sale or other disposal. Accounts and other receivables Accounts and other receivables are stated at amortised cost as reduced by appropriate allowances for estimated irrecoverable amounts.



89


Cash and cash equivalents Cash and cash equivalents are measured at fair value.

10.3 Financial liabilities The SETA’s principal financial liabilities are accounts and other payables. All financial liabilities are measured at amortised cost, comprising original debts less principle payments and amortisations, except for financial liabilities held-for trading and derivative liabilities, which are subsequently measured at fair value. Gains and losses arising from a change in the fair value of financial instruments, other than available-for-sale financial assets, are included in net profit or loss in the period in which it arises. Gains and losses arising from a change in the fair value of available-for-sale financial assets are recognised in equity, until the investment is disposed of or is determined to be impaired, at which time the net profit or loss is included in the net profit or loss for the period.

A financial asset or a portion thereof is derecognised when the SETA realises the contractual rights to the benefits specified in the contract, the rights expire, the SETA surrenders those rights or otherwise loses control of the contractual rights that comprise the financial asset. On derecognition, the difference between the carrying amount of the financial asset and the sum of the proceeds receivable and any prior adjustment to reflect the fair value of the asset that had been reported in equity is included in net profit or loss for the period.

A financial liability or a part thereof is derecognised when the obligation specified in the contract is discharged, cancelled, or expires. On derecognition, the difference between the carrying amount of the financial liability, including related unamortised costs, and the amount paid for it is included in net profit or loss for the period. The fair values at which financial instruments are carried at the balance sheet date have been determined using available market values. Where market values are not available, fair values have been calculated by discounting expected future cash flows at prevailing interest rates. The fair values have been estimated using available market information and appropriate valuation methodologies, but are not necessarily indicative of the amounts that the SETA could realise in the normal course of business. The carrying amounts of financial assets and financial liabilities with a maturity of less than one year are assumed to approximate their fair value due to the short-term trading cycle of these items. Financial assets and financial liabilities are offset if there is any intention to realise the asset and settle the liability simultaneously and a legally enforceable right to offset exists.

11.1 Reserves Equity is sub-classified in the balance sheet between the following funds and reserves:

◊ Administration reserve ◊ Employer grant reserve ◊ Discretionary reserve


90

This sub-classification is made based on the restrictions placed on the distribution of monies received in accordance with the Regulations issued in terms of the Skills Development Act, 1998 (Act No. 97 of 1998). Member employer company levy payments are set aside in terms of the Skills Development Act and the regulations issued in terms of the Act, for the purpose of: 2012/13 2011/12 % %Administration costs of the SETA 10 10Employer Grant Fund Levy 50 50Mandatory Workplace Skills Planning Grant 50 50Discretionary grants and projects 20 20 80 80 In addition, contributions received from public service employers in the national or provincial spheres of government may be used to pay for its administration costs. Interest and penalties received from SARS as well as interest received on investments are utilised for discretionary grants and projects. Other income received are utilised in accordance with the original source of the income. The net surplus/deficit is allocated to the administration reserve, the mandatory grant reserve and the discretionary fund reserve based on the above table. Surplus funds is moved to the discretionary fund reserve from the administration reserve based on unspent funds at year-end and from the mandatory grant based on unclaimed grants after the prescribed time-frames have elapsed.

11.2 Related parties

CHIETA operates in an economic environment currently dominated by entities directly or indirectly owned by the South African government. All national departments of government and state-controlled entities are regarded as related parties in accordance with Circular 4 of 2005: Guidance on the term “state controlled entities” in context of IAS 24 (AC 126) - Related Parties, issued by the South African Institute of Chartered Accountants. Other related party transactions are also disclosed in terms of the requirements of the accounting standard.

11.3 Inventories Inventories are measured at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

The cost of inventories comprises of all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.



91


The cost of inventories of items that are not ordinarily interchangeable and goods or services produced and segregated for specific projects is assigned using specific identification of the individual costs.

The cost of inventories is assigned using the first in first out (FIFO) / weighted average formula. The same cost formula is used for all inventories having a similar nature and use to the entity.

When inventories are sold, the carrying amount of those inventories are recognised as an expense in the period in which the related revenue is recognised. The amount of any write-down of inventories to net realisable value and all losses of inventories are recognised as an expense in the period the write-down or loss occurs.

11.3 Commitments and contingencies Commitments comprise those future expenses that CHIETA has committed itself to contractually, but for which a present obligation for the payment thereof does not exist at the reporting date. Accordingly these commitments are not recognised as liabilities but are disclosed in the notes to the annual financial statements. Please refer to note 15.


92

Notes to the Annual Financial Statements for the year ended 31 March 2013

1a.

ALL

OCA

TIO

N O

F N

ET S

URP

LUS

FOR

THE

YEA

R TO

RES

ERV

ES F

OR

THE

YEA

R EN

DED

31

MA

RCH

201

3

Man

dato

ry re

serv

eD

iscr

etion

ary

rese

rve

tota

l per

In

com

e St

atem

ent

Adm

inis

trati

on

rese

rve

Man

dato

ry

skill

s pl

anni

ng a

nd

impl

emen

tati

on

gran

tto

tal

Dis

creti

onar

y gr

ants

CH

IetA

pr

ojec

tsto

tal

disc

reti

onar

yTo

tal r

even

ue40

2 38

4 39

087

21

5 47

1 21

5 47

1 14

7 82

6 -

147

826

Skill

s de

velo

pmen

t lev

y: in

com

eA

dmin

levy

inco

me

(10%

)48

283

48

283

-

- -

--

Gra

nt le

vy in

com

e (7

0%)

333

402

-23

8 59

2 23

8 59

2 94

810

-

94 8

10

Skill

s de

velo

pmen

t lev

y:

Pena

lties

and

inte

rest

1 53

2 -

--

1 53

2 -

1 53

2 In

vest

men

t inc

ome

19 1

65

--

- 19

165

-

19 1

65

Oth

er in

com

e2

--

- 2

-2

Tran

sfer

to D

iscr

etion

ary

Rese

rve

-(9

196

)(2

3 12

1)(2

3 12

1)32

317

-

32 3

17

Tota

l exp

ense

s39

5 97

0 39

087

21

5 47

1 21

5 47

1 11

0 24

1 31

171

14

1 41

2 A

dmin

istr

ation

exp

ense

s39

058

39

058

-

- -

--

Loss

on

Dis

posa

l 29

2

9 -

--

--

Empl

oyer

gra

nts

and

proj

ect

expe

nses

356

883

-

215

471

215

471

110

241

31 1

71

141

412

Net

sur

plus

per

sta

tem

ent

of fi

nanc

ial

perf

orm

ance

allo

cate

d6

414

-

- -

37 5

85

(31

171)

6 41

4


93


1a.

ALL

OCA

TIO

N O

F N

ET S

URP

LUS

TO R

ESER

VES

FO

R TH

E YE

AR

END

ED 3

1 M

ARC

H 2

012

Man

dato

ry re

serv

eD

iscr

etion

ary

rese

rve

tota

l per

In

com

e St

atem

ent

Adm

inis

trati

on

rese

rve

Man

dato

ry

skill

s pl

anni

ng a

nd

impl

emen

tati

on

gran

tto

tal

Dis

creti

onar

y gr

ants

CH

IetA

pr

ojec

tsto

tal

disc

reti

onar

yTo

tal r

even

ue35

3 42

7 35

105

18

8 83

5 18

8 83

5 12

9 48

7 -

129

487

Skill

s de

velo

pmen

t lev

y: in

com

eA

dmin

levy

inco

me

(10%

)42

456

42

456

-

- -

--

Gra

nt le

vy in

com

e (7

0%)

288

497

-20

7 08

4 20

7 08

4 81

413

-

81 4

13

Skill

s de

velo

pmen

t lev

y:

Pena

lties

and

inte

rest

1 72

6 -

--

1 72

6 -

1 72

6 In

vest

men

t inc

ome

20 7

12

--

- 20

712

-

20 7

12

Oth

er in

com

e36

-

--

36

-36

Tr

ansf

er to

Dis

creti

onar

y Re

serv

e-

(7 3

51)

(18

249)

(18

249)

25 6

00

-25

600

To

tal e

xpen

ses

297

689

35 1

05

188

835

188

835

47 1

69

26 5

80

73 7

49

Adm

inis

trati

on e

xpen

ses

34 9

46

34 9

46

--

--

- Lo

ss o

n D

ispo

sal

159

159

--

--

-Em

ploy

er g

rant

s an

d pr

ojec

t ex

pens

es26

2 58

4

- 18

8 83

5 18

8 83

5 47

169

26

580

73

749

N

et s

urpl

us p

er s

tate

men

t of fi

nanc

ial

perf

orm

ance

allo

cate

d55

738

-

- -

82 3

18

(26

580)

55 7

38


94


2. SKILLS DEVELOPMENT LEVY INCOME 2012/13 2011/12note R’000 R’000

The total levy income per the Income Statement is as follows:Levy income: Administration 48 283 42 456

Skills development levies transferred from department of higher education and training 48 257 42 436 Interseta transfers in 26 20

Levy income: Employer Grants 238 592 207 084 Skills development levies transferred from department of higher education and training 238 461 206 959 Interseta transfers in 131 125

Levy income: Discretionary Grants 94 810 81 413 Skills development levies transferred from department of higher education and training 94 757 81 374 Interseta transfers in 53 39

381 685 330 953

3. INVESTMENT INCOMEInterest income 19 165 20 712

Bank deposits 19 165 20 712

19 165 20 712

4. EMPLOYER GRANT AND PROJECT EXPENSESMandatory grants 215 471 188 835

Disbursed 193 856 232 049 Movement in provisions and accruals 21 615 (43 214)

Discretionary grants 15.1 110 241 47 169 Disbursed 93 219 52 056 Movement in provisions and accruals 17 022 (4 887)

Project expenditure 15.1 31 171 26 580 Disbursed 25 228 26 745 Movement in provisions and accruals 5 943 (165)

356 883 262 584 4.1 Project expenditure consist of:

Direct project costs 31 171 26 580 31 171 26 580


95


5. ADMINISTRATION EXPENSES 2012/13 2011/12note R’000 R’000

Depreciation 619 304 Amortisation of intangibles 59 35 Operating lease rentals (minimum lease payments) 1 639 2 056

Buildings 1 639 2 056 Maintenance, repairs and running costs 244 208

Property and buildings 244 208 Utilities 418 618

Advertising, marketing and promotions, communication 616 310 Consultancy and service provider fees 2 886 1 191 Legal fees 1 369 877 Cost of employment 5.1 21 240 19 366 Travel and subsistence 2 060 1 474 Training and development 282 479 Remuneration to members of the accounting authority 569 706 Remuneration to members of the audit committee 242 346 Internal auditors remuneration 1 080 1 281 External auditor’s remuneration 1 821 1 757

Audit fees 1 821 1 757 Internet Service (ISP) 641 648 Telephone and Fax 634 664 Printing and stationary 669 591 Insurance costs 249 249 Workshop and meetings 454 169

Other 1 267 1 617 39 058 34 946

Refer to the report of the accounting authority for disclosure concerning the remuneration to the members of the Accounting Authority, Chief Executive Officer; Chief Financial Officer and Senior Managers.


96


5.1 Cost of employment 2012/13 2011/12note R’000 R’000

Salaries and wages 18 240 16 656 Basic salaries 10 284 12 552

Performance awards 2 923 2 065 Temporary staff 3 960 1 355 Leave provision 1 073 684

Social contributions 3 000 2 710 Medical aid contributions 608 455 Provident fund contributions: defined contribution plans 2 304 2 209 UIF 88 46

21 240 19 366 Allocation of cost of employmentAdministration expenses 5 21 240 19 366

21 240 19 366

Average number of employees 35 34

6. PROPERTY, PLANT AND EQUIPMENT

Cost

Accumulated depreciation/ impairment

Closing carrying amount

Year ended 31 March 2013 R’000 R’000 R’000

Computer equipment 1 514 (979) 535 Office furniture and fittings 2 038 (1 503) 535 Office equipment 1 132 (554) 578 Balance at end of period 4 683 (3 036) 1 648 Made up as follows:

◊ Owned assets 4 683 (3 036) 1 648

Year ended 31 March 2012

Computer equipment 1 505 (1 088) 417 Office furniture and fittings 1 489 (1 356) 133 Office equipment 888 (567) 321 Balance at end of period 3 882 (3 011) 871 Made up as follows:

◊ Owned assets 3 678 (2 807) 871 ◊ Leased assets 204 (204) -


97


Movement summaryfor the Year ended 31 March 2013

Carrying amount

2012 Adjustments Additions Disposals

Depreciation/ Amortisation

charge

Carrying amount

2013R’000 R’000 R’000 R’000 R’000 R’000

Movement summary 2013Computer equipment 417 - 345 (27) (200) 535 Office furniture and fittings 133 - 598 (1) (195) 535 Office equipment 321 - 481 - (224) 578 Balance at end of period 871 - 1 424 (28) (619) 1 648

Movement summary 2012

Computer equipment 404 1 223 (72) (139) 417 Office furniture and fittings 169 - 31 (16) (51) 133 Office equipment 428 (1) 59 (51) (114) 321 Balance at end of period 1 001 - 313 (139) (304) 871

During the reassessment of useful lives and residual values, it has become evident that certain items of property, plant and equipment have become obsolete. Consequently these were scrapped.

7. INTANGIBLE ASSETS - COMPUTER SOFTWARE 2012/13 2011/12R’000 R’000

Opening carry value 146 110 Cost / valuation 494 1 384 Accumulated amortisation (348) (1 274)

Movements during the year (19) 36 Additions / 40 92(Disposals) - (21)Amortisation (59) (35)

Closing carry value 127 146 Cost / valuation 534 494 Accumulated amortisation (407) (348)

During the reassessment of useful lives and residual values, it has become evident that certain computer software have become obsolete. Consequently these were scrapped.


98


8. PREPAYMENTS AND ADVANCES 2012/13 2011/12R’000 R’000

Staff Advances 49 52 Prepayments - 32 Closing balance 49 84

9. ACCOUNTS RECEIVABLEDeposits (Non-Exchange) 119 123 Trade receivables (Non-Exchange) 771 1 703 Employer receivable (Non-Exchange) 46 203

936 2 029

CHANGE IN ACCOUNTING ESTIMATE

The main assumption for the reassessment is:

During the period the useful lives of property, plant and equipment as well as the useful lives of intangible assets were re-assessed in line with the requirements of GRAP 17 and GRAP 102. Following the reassessment the remaining useful lives of property, plant and equipment as well as the remaining useful lives of intangible assets were assessed at 3 years. This is attributable to additional / new information that became available during the year regarding the continuance of the various SETA’s. CHIETA will have a licence for the next 3 years, therefore the assets are depreciated in accordance with the period of the licence to continue operating.

The additional information that became available has resulted in a change in the useful lives of the assets of CHIETA, which constitutes a change in accounting estimate in accordance with GRAP 3. The impact of the change in accounting estimate is a reduction in the annual depreciation and amortisation expenses. It is expected that this trend may continue in future periods.

The depreciation and amortisation expenses have decreased as follows for the 2013 financial year:

Before change in estimate

After change in estimate net Decrease

Amortisation: Computer software 82 59 24 Depreciation: Computer equipment 281 200 82 Depreciation: Furniture & fittings 59 195 (137) Depreciation: Office equipments 67 224 (156)

490 677 (188)


99


9.1 Bad debts written off 2012/13 2011/12R’000 R’000

Employee receivable - 55Amounts written-off - (55)

Employee receivable - -

10. CASH AND CASH EQUIVALENTSCash at bank and in hand 428 779 369 596

Cash at bank 428 774 369 595 Cash on hand 5 1

Cash and cash equivalents at end of year 428 779 369 596

As required in Treasury Regulation 31.2, National Treasury approved the banks where the CHIETA bank accounts are held. The weighted average interest rate on short term bank deposits was 5 % (2012: 5%).

Cash includes cash on hand and cash with banks. Cash equivalents are short term, highly liquid investments that are held with registered banking institutions with maturities of three months or less and that are subject to an insignificant risk of change in value.

For the purposes of the cash flow statement, cash and cash equivalents comprise cash on hand, deposits held at call with banks, and investments in money market instruments.

11. ACCOUNTS PAYABLE 2012/13 2011/12note R’000 R’000

68 312 14 858 Skills development grants payable - mandatory (Non-Exchange) 33 266 11 651 Skills development grants payable - discretionary (Non-Exchange) 20 053 3 031 Project creditors (Non-Exchange) 5 955 12 Interseta payables (Non-Exchange) 18 164 164 SARS Payable (Non-Exchange) 8 874 -

Sundry payables 10 621 11 688 Other Accruals (Exchange) 4 294 5 840 Leave and Bonus pay accrual (Exchange) 11.1 4 003 3 916 Service provider fees outstanding (Exchange) 2 043 1 819 Trade payables (Exchange) 281 113

78 933 26 546


100


13. RECONCILIATION OF NET CASH FLOW FROM OPERATING ACTIVITIES TO NET SURPLUS

2012/13R’000

2011/12R’000

Net surplus as per statement of financial performance 6 414 55 738 Adjusted for non-cash items:

Depreciation 619 304 Amortisation 59 35

Adjusted for items separately disclosed:Investment income (19 165) (20 712)Finance costs 27 157

Adjusted for working capital changes:(Increase) in receivables 1 104 (1 689)Increase / (decrease) in payables 52 387 (44 538)Decrease in prepayments and advances 35 (44)

Cash generated from operations 41 480 (10 749)

14. CONTINGENCIES

In terms of the PFMA, all surplus funds as at year-end may be forfeited to National Treasury. The CHIETA has requested formal rollover of any unspent funds and has communicated this in writing as per National treasury requirements. No formal approval has as yet been obtained from National Treasury to retain surplus funds at the time of submission of these Annual Financial Statements.

11.1 leave and Bonus pay accrual

employee leave provision

employee bonus

provision

2012/13R’000

2011/12 R’000

Open carrying amount 1 015 2 901 3 916 2 441 Amounts utilised (1 015) (2 901) (3 916) (2 441)Change in estimate 1 043 2 960 4 003 3 916 Closing carrying amount 1 043 2 960 4 003 3 916

Current 1 043 2 960 4 003 total 1 043 2 960 4 003

Employee entitlements relate to leave credits available to employees of the CHIETA. Leave balances of employees are multiplied by the daily rate of each employees salary and quantified to the amount of leave credits available.

12. NATIONAL SKILLS FUND: SPECIAL PROJECTS 2012/13 2011/12R’000 R’000

Opening balance - 1 107 Reimbursed to National Skills Fund - (1 107)Closing balance - -

During the current year no liability was recognised as no funds were received from the NSF. As at year end no further liability was outstanding to the National SKills Fund.


101


15.

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105


15.2 Operating Leases 2012/13 2011/12R’000 R’000

Minimum lease payments under operating leases recognised as an expense in the yearAt the reporting date the entity has outstanding commitments under operating leases which fall due as follows: 1 639 2 056

Not later than one year 2 083 1 942 Later than one year and not later than five years 4 098 6 180

6 181 8 123

Operating lease payments represent rentals payable by the entity for certain of its office properties. Leases are negotiated for an average term of 4 years and rentals escalate on average by 8% per annum. The monthly payments for property assessment rates and taxes and municipal charges are included as part of other operating expenditure in the statement of financial performance.

17. FINANCIAL INSTRUMENTS

In the course of the CHIETA operations it is exposed to interest rate, credit, liquidity and market risk. The CHIETA has developed a comprehensive risk strategy in terms of TR 28.1 in order to monitor and control these risks. The risk management process relating to each of these risks is discussed under the headings below.

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

Irregular, Fruitless and Wasteful Expenditure:

To the best of our knowledge, no material losses through criminal conduct, or irregular, fruitless and wasteful expenditure were incurred during the year ended 31 March 2013.

Irregular expenditure 2012/13 2011/12R’000 R’000

Opening balance - 584 Amount condoned - (584)Closing Balance - -


106

Floating rate Fixed RateNon-interest

bearing

totAl R’000Year ended 31 March 2013

Amount R’000

Effective interest

rateAmount

R’000

Weighted average effective

interest rate %Amount

R’000Assets

Cash 409 614 5.0% 19 165 5.0% - 428 779 Accounts receivable - - - 936 936

409 614 5.0% 19 165 5.0% 936 429 715 Liabilities

Accounts payable - - - - 78 933 78 933 - - - - 78 933 78 933

Year ended 31 March 2012 Total financial assets 348 884 - 20 712 - - 369 596 Total financial liabilities - - - - 26 546 26 546

348 884 - 20 712 - 26 546 396 142

Credit risk

Financial assets, which potentially subject the CHIETA to the risk of non performance by counter parties and thereby subject to credit concentrations of credit risk, consist mainly of cash and cash equivalents, investments and accounts receivable.

The CHIETA management limits its treasury counter-party exposure by only dealing with well-established financial institutions approved by National Treasury through the approval of their investment policy in terms of Treasury Regulations.

Credit risk with respect to levy paying employers is limited due to the nature of the income received. The CHIETA does not have any material exposure to any individual or counter-party. The CHIETAs concentration of credit risk is limited to the industry in which the CHIETA operates. No events occurred in the industry during the financial year that may have an impact on the accounts receivable that has not been adequately provided for. Accounts receivable are presented net of allowance for doubtful debt.


Interest rate risk

The Seta’s exposure to interest rate risk and the effective interest rates on financial instruments at balance sheet date are as follows:


107

liquidity risk

The CHIETA manages liquidity risk through proper management of working capital, capital expenditure and actual vs forecasted cash flows.

Market risk

The CHIETA is exposed to fluctuations in the employment market for example sudden increases in unemployment and changes in the wage rates. No significant events occurred during the year that the CHIETA are aware of.

Fair values

The CHIETA’s financial instruments consist mainly of cash and cash equivalents, account and other receivables, and account and other payables. No financial instruments were carried at an amount in excess of its fair value. The following methods and assumptions are used to determine the fair value of each class of financial instrument:

Cash and cash equivalents

The carrying amount of cash and cash equivalents approximates fair value due to the relatively short-term maturity of these financial assets.

Accounts receivable

The carrying amount of accounts receivable, net of allowance for bad debt, approximates fair value due to the relatively short-term maturity of these financial assets.

Accounts payable

The carrying amount of account and other payables approximates fair value due to the relatively short-term maturity of these financial liabilities.



108

18. RELATED PARTY TRANSACTIONS

Transactions with other SETAs

Interseta transactions and balances arise due to the movement of employers from one SETA to another. The following transactions occurred during the year with other SETAs.

The balances at year-end included in receivables and payables are:2012/13 2011/12

R’000 R’000transfers in/(out)

during the year

Amount receivable/(payable)

transfers in/(out)

during the year


Receivables 210 - 187 - MQA - - 69 -FOODBEV 14 - - - HEALTH AND WELFARE 12 - 114 - BANKSETA 7 - - - AGRISETA - - 4 - SERVICES 178 - -

payables - (164) - (164) W&R SETA - (3) - (3)MQA - (69) - (69)MERSETA - (92) - (92)total 210 (164) 187 (164)

Transactions with Board member representative companies

2012/13 2011/12Constituency of Board Member R’000 R’000

Transacting Company

Transaction type

Amount of the

transaction


Amount of the

transaction


payablesSpeciality chemicals and surface coatings

Barloworld Coatings

Discretionary Grant - - 2 410 2 410

Explosives and fertilizersOmnia

Discretionary Grant 3 640 3 640 - -

Speciality chemicals and surface coatings Plascon

Discretionary Grant - - 11 580 11 580

Base chemicals and petroleum Sasol Limited

Discretionary Grant 20 025 20 025 - -

total 23 665 23 665 13 990 13 990

The above transactions occurred under terms that were no less favourable than those available in similar arm’s length dealings.



109

19. INVENTORIES 2012/13 2011/12R’000 R’000

Inventories consist of : Consumable Stores

Stationary 14 3Marketing / promotional material 51 73

65 76

20. COMPARISON OF BUDGET AND ACTUAL AMOUNTS FOR THE YEAR ENDED 31 MARCH 2013

Legislation requires that the SETA annually, in September submit a budget to the Minister for approval. Any subsequent changes required to the initial budget are approved by the Board on recommendation of the Finance Committee.

20.1 Skills Development Levy: income

The favourable variance in skills development levy income is due to a higher than anticipated return of levies from member companies. The CHIETA budgeted for an 8% increase in levy income for the financial year, and received a 15.3% increment. Based on an analyses of levy income it appears that the employee base in the sector continued to expand during the period in excess of the inflationary target. The increase is also partly due to R11 million worth of UIF levy income incorrectly paid to CHIETA by SARS. The UIF levy constitutes 3% to the total increase in skills development levy income received during the 2012-13 financial year. These levies will be recovered by SARS from future levy payments to the CHIETA in the 2013/14 financial year.

20.2 Skills Development Levy: penalties and interest

Income from penalties and interest arise when employers fail to submit their returns as required by legislation. These amounts typically vary significantly year on year. The full balance is made available for projects.

20.3 Investment income

Investment income was 28% more than what was budgeted for due to competitive interest rates obtained on CHIETA’s investments in 2012/13 as a result of larger than anticipated levy income.

20.4 Employer grant and project expenses

The approved final budget only includes the estimated mandatory grant spending of the current financial year. There was an increase in mandatory grant expenditure due to the increase in levies received and the increase in Work Place Skills Plans submitted by the employers. The approved final budget only includes the estimated project spending of the current financial year. The over expenditure related to increased project expenditure, utilising prior year reserves. This over expenditure is acceptable practice within the SETA environment given the multi year nature of many projects.



110

20.5 Administration expenses

Administration expenditure is limited to 10% of levies received. The legislation limit has not been exceeded and the savings will be utilised to fund sector skills priorities, through various projects.

20.6 loss on Disposal

The loss on disposal was not budgeted for as it could not be anticipated at the time that certain property plant and equipment would be obsolete at year end. During the reassessment of useful lives and residual values, it has become evident that certain items of property, plant and equipment have become obsolete. Consequently these were scrapped.

21. CONTINGENCIES

Contingent Liabilities:

The CHIETA is currently defending a claim in the capital sum of R3,600,000 plus interest and legal costs made against the CHIETA by Cedar Park Properties (Pty) Ltd pertaining to the alleged repudiation of the lease agreement entered into by the former CHIETA CEO. The pending legal matter is currently in the pleading stage and management is uncertain of the outcome of the litigation. As reported previously and contrary to the requirements of section 66(3)(b) of the PFMA, the former CEO of CHIETA signed a bank guarantee during the 2010-11 financial year without the approval of the accounting authority. An amount of R561,492 relating to the bank guarantee is subject to the outcome of litigation with the landlord. The total extent of penalties or recovery of expenses that the CHIETA will be subjected to could not be quantified, pending finalisation of litigation with Cedar Park Properties (Pty) Ltd

Contingent Asset:

The CHIETA have instituted a counterclaim in the capital sum of R1,706,936 plus interest and penalties against Cedar Park Properties relating to the recovery of lease rentals that were transferred to Cedar Park properties via a debit order agreement entered into by the former CHIETA CEO. The pending legal matter is currently in the pleading stage and management is uncertain of the outcome of the litigation.



111

Signed on behalf of the accounting authority by:

Ayesha Itzkin nolitha Fakude Acting Chief Executive Officer Chairperson of the Accounting Authority

CONTENTS Page

Objective ................................................................................................................................................112

Legal framework .....................................................................................................................................112

Factors considered in developing the framework ..................................................................................113

Materiality ..............................................................................................................................................115

Significant ...............................................................................................................................................115

Reporting of the framework ...................................................................................................................116

Annexure A .............................................................................................................................................116

Materiality and Significance Framework Policy Statementfor the 2012/2013 financial year


112

Objective

The policy is intended to determine material and significant events that warrant disclosure by the Accounting Authority to:

◊ The Executive Authority / Legislature.◊ The National Treasury.◊ The Office of the Auditor-General.

Therefore events of a similar nature as considered material and significant, but does not constitute material and significant will be managed “in-house” by the Accounting Authority in terms of formal enquiries and disciplinary processes defined by the Human Resources policies and procedures.

Legal Framework

In terms of Treasury Regulations, Section 28.1.5, issued in terms of the Public Finance Management Act, Act No. 1 of 1999, the Accounting Authority must develop and agree to a framework of acceptable levels of materiality and significance with the relevant Executive Authority, in consultation with the external auditors.

The specific sections of the Public Finance Management Act that is relevant to:

Materiality are:

◊ section 50(1)(c) – “The Accounting Authority for a public entity must on request, disclose to the Executive Authority responsible for that public entity or the legislature to which the public entity is accountable, all material facts, including those reasonably discoverable, which in any way influence the decision or actions of the Executive Authority or that legislature.”

◊ section 55(2)(b)(i) – “The annual report and financial statements must include particulars of any material losses through criminal conduct and any irregular expenditure, and fruitless and wasteful expenditure that occurred during the financial year.”

◊ section 66(1) – “An institution to which this Act applies may not borrow money or issue a guarantee, indemnity or security, or enter into any other transaction that binds or may bind that institution or the Revenue Fund to any future financial commitment, unless such borrowing, guarantee, indemnity, security, or other transaction is:

− Authorised by this Act; and − In the case of public entities, is also authorised by other legislation not in conflict with this Act; and − In the case of loans by a province or a provincial government business enterprise under the ownership control of

a provincial executive, is within the limits as set in terms of the Borrowing Powers of Provincial Governments Act, 1996 (Act No. 48 of 1996).”

Significance is:

◊ section 54(2) – “Before a public entity concludes any of the following transactions, the Accounting Authority for the public entity must promptly and in writing inform the relevant treasury of the transaction and submit relevant particulars of the transaction to its Executive Authority for approval of the transaction:

Materiality and significance Framework Policy statementfor the 2012/2013 financial year


113

− Establishment or participation in the establishment of a company. − Participation in a significant partnership, trust, unincorporated joint venture or similar arrangement. − Acquisition or disposal of a significant asset. − Commencement or cessation of a significant business activity. − A significant change in the nature or extent of its interest in a significant partnership, trust, unincorporated joint

venture or similar arrangement.”

Factors considered in developing the Framework

The following factors were considered in determining the framework:

◊ Nature of the business

Given the nature of the organisation’s activities i.e. –

− The creation and registration of national standards and qualifications in the sector and sub-sectors. − To curriculate, assess, certify and manage performance in the sector to ensure targeted and generic service skills. − To ensure that a quality learning provision is maintained throughout the sector. − To create and maintain a database to target generic and specific skills development. − To engage in learnerships and skills programme activities. − To implement the Sector Skills Plan.

A lower level of materiality is considered appropriate.

◊ Statutory Requirements

The organisation is a public entity, as contained in Schedule 3A of the Public Finance Management Act, and is governed by legislation applicable to government entities. Such legislation is therefore prepared in terms of good corporate governance and is intended to govern finance, supply-chain management, asset management etc, within the organisation. In light of this, the probability of a material or significant infringement is considered unlikely.

◊ Governance Structure

The Accounting Authority (Governing Board) is represented by its stakeholders i.e. organised employer and employee representation from the sector. The Accounting Authority, in terms of legislation, is accountable for the performance and governance of the organisation to the Executive Authority (Minister of Labour). In terms of governance, the organisation is further directed by the Audit Committee (external members), the External Auditors (the Auditor-General’s office), the Internal Auditors (external firm of auditors).

In view of the external participation in the operations of the organisation, it is considered appropriate to have a lower level of materiality.



114

◊ Control and Inherent Risks

The following factors were examined in determining the control and inherent risk in the organisation:

− Annual risk assessment. − Three-year internal audit plan. − Fraud prevention plan. − Appropriate procurement policy and modalities. − The implementation and adoption of a quality management system. − Technical competence, skills and experience of staff engaged in the decision making process. − Structure of the Audit Committee with reference to the King Code of Corporate Governance.

In terms of the control and inherent risks, a lower level of materiality is considered appropriate.

◊ Qualitative Factors

Materiality is only related to the size of, and the elements of the financial statements. Misstatements that are large, individually or in aggregate may affect a reasonable user’s assessment. Misstatements may also be material on qualitative grounds. The organisation has considered the following qualitative factors:

− Unusual transactions entered into that are not of a repetitive nature and are disclosable due to the nature and the knowledge thereof, affecting the decision-making of the users of financial statements.

− Sizable increase in the stakeholder base i.e. more member companies contributing SDL to the organisation. − Fraudulent or dishonest behaviour of ALL officers or staff of the organisation. Any rand value will warrant

disclosure. − Operations in regions that are economically unstable or the expansion into new locations. − Operations exposed to volatile markets. − Going concern and liquidity, including loss of significant stakeholders. − Constraints on the availability of capital and credit. − Changes in the industry in which the entity operates. − Developing or offering new products or services. − Entities or business segments likely to be traded or lost. − Complex alliances and joint ventures. − Changes in key personnel, including departure of key executives. − Changes in the IT environment. − Pending litigation and contingent liabilities. − Public accountability to stakeholders, parliament, auditors and the community at large. − The sensitivity of the organisation’s financial information in making decisions. − Inadequate policies and procedures to mislead users. − Material infringement of legislation. − The imposition of regularity restrictions that can impair operating capabilities. − Any transaction entered into that could result in reputation risk. − Application of new or changes in accounting policy.



115

Materiality

Definition

Information is material if its omission or misstatement could influence the economic decisions of users taken on the basis of the financial statements. Materiality depends on the size of the item or error judged in the particular circumstances of its omission or misstatement. Thus materiality provides a threshold or cut-off point, rather than being a primary qualitative characteristic which information must have if it is to be useful.

Materiality level

The level of a material loss is assessed at 1% of budgeted total revenue (NSF revenue and VAT excluded, includes levy income, interest and penalties and any other income).

Different levels of materiality can be used and the decision to use a conservative level of 1%, irrespective of whether the transaction / event relates to assets, liabilities, or reserves, is based on the fact that the total assets of the organisation are not considered to be an indicator of performance as the organisation is not an asset- intensive entity. And the revenue component is selected as a basis for the materiality calculation, as the level of activity (Grant and Discretionary disbursements) is dependent on the total revenue received.

Significant

Definition

A transaction is significant if conducting the transaction is vitally important to fulfill the organisation’s mandate and for it to operate effectively.

Significance is larger than materiality, as significant transactions may impact the organisation as a whole. A transaction may be material but not significant, whereas all significant transactions are material.

Significance Level

The organisation will promptly and in writing inform the National Treasury of the transaction and submit relevant particulars of the transaction to its Executive Authority for approval of the transaction. The following transactions will be regarded as significant and will require full disclosure:

− Establishment or participation in the establishment of a company. − Participation in a significant partnership, trust, unincorporated joint venture or similar arrangement. − Acquisition or disposal of a significant asset. − Commencement or cessation of a significant business activity. − A significant change in the nature or extent of its interest in a significant partnership, trust, unincorporated joint

venture or similar arrangement.



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Reporting of the Framework

The materiality and significance framework must be updated yearly, preferably before the financial year commences to ensure the identification of material and significant transactions. The framework will further be developed in consultation with the external auditors.

The framework will be included into the:

− Corporate / Strategic Plan and − Annual Report.

The framework will be disclosed as contained in Annexure A attached.

AnneXuRe A

TREASURY REGULATION 28.1.5

“For purposes of “material” [sections 50(1), 55(2) and 66(1) (c) of the Act] and “significant” [Section 54(2) of the Act], the accounting authority must develop and agree to a framework of acceptable levels of materiality and significance with the relevant executive authority in consultation with the external auditors.”

MAteRIAlSection 50 (1)

(1) The accounting authority for a public entity must −

(c) on request, disclose to the executive authority responsible for that public entity or the legislature to which the public entity is accountable, all material facts, including those reasonably discoverable, which in any way influence the decision or actions of the executive authority or that legislature.

Quantitative – 1% of total revenue

Qualitative – events as contained in the Materiality and Significance Framework Policy.

Section 55 (2)

(2) The annual report and financial statements must –

(b) include particulars of –

(i) any material losses through criminal conduct and any irregular expenditure and fruitless and wasteful expenditure that occurred during the financial year

Quantitative – 1% of total revenue

Qualitative – events as contained in the Materiality and Significance Framework Policy



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MAteRIAlSection 66 (1)

(1) An institution to which this Act applies may not borrow money or issue a guarantee, indemnity or security, or enter into any other transaction that binds or may bind that institution or the Revenue Fund to any future financial commitment, unless such borrowing, guarantee, indemnity, security or other transaction –

(a) is authorised by this Act; and

(b) in the case of public entities, is also authorised by other legislation not in conflict with this Act; and

(c) in the case of loans by a province or a provincial government business enterprise under the ownership control of a provincial executive, is within the limits as set in terms of the Borrowing Powers of Provincial Governments Act, 1996 (Act No 48 of 1996).

All events / transactions will require disclosure – 100% compliance

SIGNIFICANTSection 54 (2)

(1) Before a public entity concludes any of the following transactions, the accounting authority for the public entity must promptly and in writing inform the relevant treasury of the transaction and submit relevant particulars of the transaction to its executive authority for approval of the transaction –

(a) establishment or participation in the establishment of a company;

(b) participation in a significant partnership, trust, unincorporated joint venture or similar arrangement;

(c) acquisition of disposal of a significant shareholding in a company;

(d) acquisition or disposal of a significant asset;

(e) commencement or cessation of a significant business activity; and

(f) a significant change in the nature or extent of its interest in a significant partnership, trust, unincorporated joint venture or similar arrangement.

All events / transactions will require disclosure – 100% compliance



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CHIETA Staff

Vusimuzi Mkhatshwa, left, Lindiwe Mazibuko, Tshidi Magonare, Jerminah Hlapolosa, Fortune Ngwenya

Manager: Tshidi Magonare

Apprenticeship Training Unit

Meryl Plasket, left, Gift Thutse, Ruth MakwelaResearch and Skills Planning Executive: Meryl Plasket

Research and Skills Planning Division

Ayesha Itzkin, left, Kefilwe MashigoCEO: Ayesha Itzkin

CEO’s Office


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CHiETA staff

Happiness Mlambo, left, Gina Molefe, Thapelo Madibeng, Thando VeyiStrategic Projects Executive: Thapelo Madibeng

Grants and Projects Unit

Gape Tlolane, left, Charles Daconceicao, Garett Benjamin, Moeketsi Lesia, Rene Diergaardt, Zakhele Xaba, Fikile Makhoba, Thabo Ntuli, Thandekile Sokabase, Ruth Sepabelo, Brenda Mhlongo, Conrad Mphahlela

etQA unit

ETQA Manager: Stuurman Aphane


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Faith Nanemba, left, Roger Andriaanse, Nandipha ElijarRegional Manager: Roger Andriaanse

Western and Northern Cape Regional Office

CHiETA staff

Bennet Kamanga, left, Brenda Ledwaba, Bongani Mtshali, Lindiwe ZunguRegional Acting Manager: Bongani Mtshali

Gauteng and Central Office

Nompumelelo Mlambo, left,Harry Ngobeni, Bongani

Maduna, Farhad Motala, Christancia Brown,

Munya Makota, Sandile Zuma,

Louise Mc Namara.Finance Executive:

Farhad Motala

Finance Division


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CHiETA staff

Trevor Channing, left, Mongezi Shongwe, Nonhlanhla Kika, Ronnie Naidoo, Thabo Ramathoka

Governance Executive: Trevor Channing

Governance and Risk Division

Glory Nyathi, left, Medupi Marumo, Marriam Maduka, Lindiwe Zungu, Joyce Mjiyakho, Maud MatsieStakeholder Relationship Manager: Glory Nyathi

Stakeholder Relations Unit

Brunette Sacks, left, Isaac Mathoho

Human Resource unit

Aline Naidu, left, Rajen Naidoo, Nelisiwe GumedeBack rowThulasizwe Kojane, left, Olaf Normann, Beevash GansanRegional Manager: Rajen Naidoo

KZN and Eastern Cape Regional Office

Human ResourceManager: Joyce Lotz


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Major events

Annual General Meeting

Research Colloquium


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Major events

CHIETA National Skills Completion

Thank you to the CHIETA Stakeholders that sponsored the Artisan Skills Competition


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Opening of the CHIETA Office at Ehlanzeni FET College

Major events


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CHIETA HEAD OFFICE011 628 7000

CHIETA ANTI-FRAUD HOTLINETOLL FREE 0800 111 173

[email protected]

WEBSITEwww.chieta.org.za

ISBN 978-0-621-41877-4RP133/2013

the catalyst for enhanced skills, economic growth and

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