The Standing Committee on Public Accounts (Scopa) received a briefing in the form of a hearing today virtually from the Director-General of the Department of Higher Education and Training, and the management of the National Skills Fund (NSF) on the annual report and financial statements of the NSF for the financial year 2019/20, as well as irregular, fruitless and wasteful expenditure. The delegation was led by the Minister of the department, Dr Blade Nzamande.

Minister Nzimande told the committee that there is a process he has initiated, a process of reviewing, among other things, governance and other critical structures of the NSF. He said he appointed a three-person committee to perform the task which is underway. He said all the contracts that are above R1 million are going to be authorised by him as the fund is being reviewed.

In giving a background to today’s hearing, the committee told Minister Nzimande that the NSF has been consistently receiving qualified audit outcomes from the AG (Auditor-General) since the 2015-2019 financial years and a disclaimer for the 2019/20 financial year. And the fact that it has a bad history of audit outcomes and the fact that the outcome was worse for 2019/20. Furthermore, the committee told Minister Nzimande that the 2019/20 outcome has indicated that the situation is deteriorating at the NSF.

Minister Nzimande shared with the committee a contradiction he picked up in the National Skills Fund Act that the Director-General (DG) of the Department of Higher Education and Training, who is the department’s accounting officer, is both the accounting officer and the executive authority of the NSF. According to Dr Nzimande, the DG acts as the board of the entity.

The DG and the entity’s CEO were responsible for the entity for the past 10 years, yet the NSF’s Chief Executive Officer and the Chief Financial Officer were unable to answer questions on, among other things, fruitless and irregular expenditure, from Members of the committee.

The committee has directed a full-scale forensic investigations into the financial management at the entity and the investigations should focus on the last three financial years. The committee told Minister Nzimande that the Special Investigative Unit (SIU) should assist the process and that the Minister must report to it in the next 30 days about the road map regarding the plan of action.

The committee has also asked Minister Nzimande to clarify the contradiction he picked up in the NSF Act in writing and send that written clarity to the committee.

 

Issued by Chairperson of The Standing Committee on Public Accounts, Mkhuleko Hlengwa