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Minister of Higher Education and Training, Dr Blade Nzimande has placed the Wholesale and Retail Sector Education and Training Authority (W&RSETA) under administration in terms of the National Skills Development Act.

The Minister has decided, in terms of section 15 of the Act and in consultation with the National Skills Authority, to take this action due to governance challenges and failure to respond to a number of concerns the Minister had raised.

The Department of Higher Education and Training plays a central role in skills development within South Africa through the Sector Education and Training Authorities (SETAs). It is in this context that it partnered with the Departments of Labour and Small Business Development to support the Township Economies Revitalisation Programme as its contribution to government’s 9 Point Plan to stimulate the economy. The Department, through W&RSETA, had made a commitment and signed a Memorandum of Agreement to the amount of R107 million towards this programme.

“The Wholesale and Retail Sector Education and Training Authority signed an agreement with the Unemployment Insurance Fund and Department of Small Business Development, which was to help unlock the potential of SMMEs, cooperatives, townships and rural enterprises. This is an important programme of government as part of the 9 Point Plan to stimulate the economy and create much needed jobs, however it has been compromised by the board actions”, said Minister Nzimande.

The board took a decision, which is disputed by some board members, to completely withdraw from this programme and its funding without communicating or consulting the Department and relevant partners. However, some members of the board claim the resolution was to amend the agreement and not withdraw.

“This action has compromised this programme and has potential to bring the Department and the SETA system into disrepute. It furthers says volumes about the unity and cohesion of the board and its ability to take decisions, including exercising its fiduciary responsibilities. I am disappointed and aggrieved by the actions of this board and I am convinced they are not acting in the interest of the organization. They are not averse to the implications of their decisions on the country and unemployment rate we face”, Minister Nzimande further said.

W&RSETA also received a qualified audit opinion from the Auditor-General in the 2014/15 financial year. The Minister requested the board to submit a comprehensive plan to address concerns raised in the opinion, however the response was inadequate which led to a subsequent qualified audit opinion in the 2015/16 financial year.

The Minister also raised concerns about the appointment of the Chief Financial Officer who was subsequently appointed as the Chief Executive Officer (CEO) and Chief Officer: Qualifications. The Minister and Department are of the view that these appointments compromise the effectiveness of internal control processes and exposes the SETA to a risk of self-review. This meant the acting-CEO would have been reporting to herself on operational tasks she performs. A letter from the Auditor-General to the Director-General confirms this concern.

The National Skills Authority was requested to do an investigation and during its investigations, it found that some of the board members were not aware of the instruction letter from the Minister. Subsequently, they were not party to the reports submitted to the Ministry as instructed by the Minister. This further demonstrates lack of unity, cohesion and cooperation required among board members to exercise their fiduciary duties effectively and efficiently.

“I have not taken this decision lightly and I have had to take it in the interest of the SETA system, organisation and our obligations to unlock township economies and create jobs. I could not allow W&RSETA to proceed in this manner and collapse the organisation given the veracity of challenges they face. I have therefore instructed the Director-General to appoint an administrator to put the organisation back on track”, said Minister Nzimande.

The administrator has been appointed through the Government Gazette published on 3 October 2016, for a period of twelve (12) months from the date of the publication to take over the administration of W&RSETA.



Issued by the GCIS on behalf of Department of Higher Education and Training