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This past week the Construction Education and Training Authority (CETA) and the Media, Advertising, Publishing, Printing and Packaging (MAPPP) SETAs tabled their respective annual reports in Parliament. Both reports contain a litany of examples of poor management and financial maladministration and together constitute further evidence that the SETA programme is misdirected and should be terminated.

With regard to the CETA:

The CETA received a qualified audit from the Auditor-General (A-G), on the grounds that there were "significant control weaknesses with regards to the recording of transactions" and other problems related to employee grant expenses and payables.
Under ‘Unauthorized, irregular or fruitless and wasteful expenditure' the A-G also notes that "irregular expenditure to the amount of R92.7 million incurred in 2008 has not been condoned in the current financial year".
With regards to fruitless and wasteful expenditure, the A-G states "fruitless and wasteful expenditure amounting to R1.17 million has not been condoned in the current financial year"
The A-G also cites R7.66 million lost on "irregular expenditure" incurred "due to non-compliance to treasury regulation 16A9.1" and "overspending on approved project budgets".
To make matters worse the report also lists a series of contingent liabilities facing the SETA, including R14.6 million for pending litigations.

With regard to the MAPPP:

The MAPPP received a heavily qualified audit from the A-G. Indeed, there were as many as four points of qualification including: ‘Employer grants and project expenses' (its financial figures were understated and there were accuracy problems), ‘Property plant and equipment' (it failed to properly assess the depreciation of its assets), ‘National skills fund received in advance' (it misallocated funding and overstated the amount available), ‘Reserves' (lack of documentation meant amounts ranging from R245 000 to R1.6 million could not be confirmed).
The report also cites an amount of R7.2 million in irregular expenditure incurred as a result of non-compliance with the Skills Development Act and supply chain management processes.

These findings come against a disastrous history. In 2007 the MAPPP was the subject of a forensic audit, concerning transactions with the service provider CreateSA. That audit found that R9 million was used irregularly. The previous MAPPP board was suspended on allegations of mismanaging a total of R30 million and, in November 2007, it was placed under the administration of auditing firm Price Waterhouse Coopers (PWC), allowing the firm to rewrite its constitution and appoint a new board.

The DA has long argued that the SETA system should be scrapped. SETAs are largely dysfunctional and - as these two reports once again demonstrate - a waste of taxpayer's money. They are also badly conceived (a result of the ANC's obsession with making the state central to everything) because, more often than not, they do not generate the right skills needed by business who are then obliged to retrain or discount people that have come to them through the SETA system.

The DA believes government should rather offer subsidies to private companies to allow them in turn to offer internships and apprenticeships to young students.