By Johnathan Paoli
There are significant operational challenges in the National Skills Fund (NSF), according to the Higher Education and Training Department.
Briefing the Standing Committee on Public Accounts (Scopa), the department said they included issues around administration and skills development.
While Scopa chair Songezo Zibi welcomed the presentations from Higher Education Minister Nobuhle Nkabane and director-general Nkosinathi Sishi on the NSF’s latest annual rep[ort, he said cooperation was essential to address the challenges plaguing the fund.
The NSF, which has been probed by the Special Investigating Unit, only achieved nine of the 39 performance indicators for the year.
“It is important for us to work together over the next few years, to get to a point where the department and entities facilitate millions more going through the Post-School Education and Training (PSET) sector, that they are skilled and employed, in order to contribute to the economy of the country,” Zibi said.
Sishi told the meeting that performance across its three key programmes was uneven, with three out of 12 indicators met for administration, only one out of 24 achieved in terms of skills development funding, and 5 out 13 indicators were reached for PSET system improvement funding.
He said the challenges were largely attributed to inadequate integrated systems, capacity constraints and delays in project approvals.
In terms of financial highlights, Sishi said the NSF reported a revenue of R4.484 billion, which was slightly below budget expectations by 1.3%.
Expenditure saw a significant 51% increase, primarily driven by new initiatives in work-integrated learning and artisan development.
However, the NSF underspent on its budget, with skills development expenditure totalling R1.784 billion, which was 68% below the planned R4.9 billion.
Sishi explained that the underspending was linked to delays in project approvals and contracting processes.
The accumulated surplus increased by 26.79% to R3.2 billion, reflecting underutilised funds.
Sishi said that despite the glaring problems, the NSF remained committed to optimising its financial resources to better fund its programmes.
In relation to governance and compliance, the DG confirmed that the NSF maintained a qualified audit opinion with a notable reduction in material findings compared to previous years.
However, he said following the audit, there had been no new reports of irregular or fruitless expenditure.
He said the fund had implemented a comprehensive audit action plan to enhance operational effectiveness and address prior findings.
Despite these efforts, capacity constraints and insufficient project monitoring remained issues, prompting the NSF to focus on critical appointments and improved project management.
The DG said the NSF had established a structured approach to managing employee misconduct, with procedures in place for investigations and disciplinary actions.
Some past offences included a refund of R486,115 related to fruitless and wasteful expenditure, and ongoing disciplinary actions against three officials, with hearings scheduled for the end of the month.
In addition, Sishi said forensic investigations revealed significant financial irregularities, leading to the suspension of several officials and a concurrent criminal investigation by the Hawks, which was still ongoing.
The report underscored the urgent need for capacity improvements and more efficient processes in skills development initiatives.
While revenue and surplus figures showed positive growth, Sishi admitted that the organisation faced ongoing challenges that must be addressed to fulfill its mandate effectively.
“With a focus on enhancing compliance and operational efficiency, the NSF is working towards a more robust framework for skills development across the country,” he said.
The minister echoed the sentiment and said she remained determined to turn the NSF around.
“We are committed to ensuring accountability and transparency in the NSF, thus my priority revolves around accountability on all levels,” Nkabane said.
The minister said both her department and NSF were actively establishing more effective corrective measures and capacity building to enhance its efficiency in supporting skills development.
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