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The Energy SETA (ESETA) Annual Report and the Auditor General's report, tabled before the labour committee yesterday, reveals that the financial accounts of the ESETA are in such a state of disarray that the Auditor General has disclaimed the financials in totality. This goes to show that the SETA system is not delivering on its mandate by wasting millions of taxpayer rands while not training individuals as they are supposed to. The only solution is to scrap the SETA system. Some of the problems identified during the committee were:
• The general ledger does not balance by an amount of R16 million.
• There are no background documents to verify the accuracy of R63 million worth of journal entries.
• ESETA has spent more than the allowed 10% of income on "Administrative Expenses"
• The disclaimers by the Auditor General on Fruitless and Wasteful Expenditure, Irregular Expenses and Unverifiable Costs run into some 15 pages long, prompting one auditor present to remark that this was the worst he had ever seen.
When queried on the reasons for the state of chaos in the financial statements, the Acting CEO, Funamna Mankaye, and Chairperson, Nkrumah Raymond Kgagudi, pointed out that in the past 18 months:
• The CFO had resigned leaving a skeleton staff behind to look after the finances
• The CEO had also resigned
• The second CFO had to be suspended due to his concealing the terrible state of the accounts from the board
• The Internal Auditors resigned after greater accountability was demanded of them
• The Audit Committee Chairperson also resigned
• The Audit Committee has been reconstituted, but there are insufficient funds to employ competent professionals on a full time basis in this capacity
While the Labour Minister believes that financially non-performing Setas should be "frog matched, kicking and screaming, to labour committee meetings in order to make sure that they achieve unqualified audits reports", it is clear that this is an endemic problem to the SETAs - the entire SETA system has failed, the gross mismanagement of finances is a manifestation of this problem.