Interaction with the ETDP SETA on governance, administration and related matters; with Ministry

Video Annual Performance Plan (APP) of Government Departments & Entities 2026/27 The Portfolio Committee on Higher Education and Training met with the Education, Training and Development Practices Sector Education and Training Authority (ETDP SETA) to address two specific matters that had attracted significant public and media attention. The first concerned a finding by the Auditor-General of South Africa (AGSA) relating to the ETDP SETA's discretionary grant expenditure for the 2024/25 financial year, which totalled approximately R637 million. The second concerned the procurement and lease of the SETA's head office building at 45 Mooi Street in Johannesburg, including governance, administration, financial management, and related issues. The Minister of Higher Education and Training, in his opening statement, confirmed that the Ministry had taken the governance and financial management challenges at the ETDP SETA seriously and had undertaken a number of interventions. These included convening meetings with the Accounting Authority in December 2025 and April 2026, requesting independent advice from the National Skills Authority (NSA) and issuing a formal directive to the SETA in terms of Section 14A of the Skills Development Act requiring a comprehensive account on all identified governance, financial and operational matters. The SETA had responded to the directive on 20 April 2026, and the Minister was considering that response alongside the NSA's advisory note before determining next steps. The ETDP SETA's Accounting Authority presented on matters under scrutiny. On the building lease, the SETA confirmed that it had occupied premises at 45 Mooi Street from 1 July 2024, following a competitive and open procurement process conducted in accordance with National Treasury legislation. The total amount paid for the building was R8.97 million, covering rental, parking, utilities and operational costs, and not the R15 million figure that had been reported in the media. The SETA confirmed that payments had ceased in July 2025 when the decision was taken to cancel the lease, and that the total contractual exposure had the lease run its full course would have been R50.5 million. The building had subsequently been found to have an invalid occupancy certificate, dated 1990 and bearing only one signature, which had only come to light after occupation commenced. Upon discovering this, the former Chief Executive Officer (CEO) had released staff to work from home as a precautionary safety measure and had engaged the Department of Employment and Labour and the City of Johannesburg on the matter. On the discretionary grants matter, the SETA clarified that the R637 million figure cited in media reports as having gone missing represented the total discretionary grant expenditure for the 2024/25 financial year and not an amount that had disappeared from the SETA's accounts. The AGSA had selected a sample of 179 transactions totalling R116 million from within that balance for audit purposes. The final batch of documentation submitted to the AGSA on 26 July had arrived after the agreed audit cut-off and could therefore not be audited, resulting in a material limitation on the full balance. A separate finding related to seven transactions totalling R42 million, which the SETA attributed to a human error during batch processing of stipend payments in May 2024, whereby an incorrect code had been selected, causing the system to generate an erroneous accrual entry. The SETA confirmed that no money had left its bank account because of this error and that a reversal journal had been processed in July 2025. The AGSA confirmed that while it could not express an opinion on the full R637 million balance due to the material limitation, the limitation was an indicator, though not a confirmation, that a fraudulent element could be present, and recommended that a full investigation be conducted into all transactions making up the balance. Members were deeply concerned about the contradictions between the SETA's assertion that it had submitted supporting documentation to the AGSA and the AGSA's confirmation that sufficient documentation had not been received. Members noted that this contradiction could only mean that one of the two parties was not being truthful before Parliament, which constituted a serious matter given that lying before Parliament was a criminal offence. Members requested that the SETA provide the Committee with email correspondence confirming the submission of documents to the AGSA as a digital verification trail. Members were concerned about the R42 million accrual error, noting that the error had occurred in May 2024 but had only been identified and corrected in July 2025, more than 12 months later, and only after the AGSA had flagged the transactions during the audit. Members found it deeply troubling that the SETA's internal audit function, Risk Management Committee, and monthly financial review processes had all failed to detect an erroneous entry of that magnitude over a period of twelve consecutive months. Members noted that the Finance Manager had acknowledged under oath that he bore full accountability for the failures in financial record-keeping and statement preparation and placed this admission on the record. Members were further concerned about the broader pattern of financial management failures identified in the AGSA's audit report, which included missing and incomplete financial records, an absence of audit evidence supporting discretionary grant payments, material misstatements in financial reports, collapsed internal controls, and a failure by the Accounting Authority to exercise adequate oversight during the financial year. Members noted that multiple provisions of the Public Finance Management Act (PFMA) had been breached, each of which constituted a criminal offence, and called on the Department and Ministry to treat these breaches with the seriousness they deserved rather than continuing to manage the situation through a process of report exchanges and deferred decisions. Members were critical of the pace of the ministerial intervention, noting that the Minister had been made aware of the problems at the SETA as far back as December 2025, yet by the date of the meeting, the only tangible steps taken had been a preliminary investigation in January 2026 and a Section 14A directive to which the SETA had only responded on 20 April 2026. They characterised this timeline as inadequate, given the seriousness of the governance and financial management failures, and questioned whether the process of asking the SETA to investigate itself while the Department waited for reports constituted meaningful oversight. They also expressed concern about the Department's proactive oversight mechanisms, noting that the same patterns of governance failure were recurring across multiple SETAs and that the department's quarterly engagements and Service Level Agreement (SLA) monitoring processes were clearly not producing meaningful results. Members were troubled by the building procurement matter on multiple levels. Members noted that the ETDP SETA had established an External Lease Committee as far back as July 2020 to manage the transition to new premises, yet had only commenced a formal procurement process four years later in 2024, resulting in a compressed six-month process that produced a single compliant bidder and an invalid occupancy certificate that went undetected through both the Bid Evaluation Committee (BEC) and the Bid Adjudication Committee (BAC). They argued that this constituted a self-created emergency of precisely the kind that National Treasury's Supply Chain Management (SCM) Instruction 3 of 2021/22 warned against. Members further noted that between 80 and 90 staff members had been placed at risk by occupying a non-compliant building for 13 months, and emphasised that this human cost was of greater significance than the financial figures that had dominated the media coverage. Members also noted with concern that a person who had previously been suspended at the Manufacturing, Engineering and Related Services Sector Education and Training Authority (merSETA). had been appointed on a short-term contract at the ETDP SETA and had served as a member of the BAC that adjudicated the building procurement, and that the SETA had not been aware of this person's history at the time of appointment. Members questioned the decision to suspend the Chief Financial Officer (CFO) on a precautionary basis without having preferred formal charges and noted that media reports had suggested the suspension was related to the CFO's participation in the BAC process. Members observed that other BAC members had not been similarly suspended and requested that the Committee be provided with the suspension letter and the preliminary forensic report so that it could verify the SETA's account of the reasons for the suspension. The Committee's position was that an independent forensic investigation into the full R637 million discretionary grant balance was necessary and could not be deferred further. It noted that the AGSA had recommended this course of action and that the current forensic process, which related to the building matter, was insufficient to address the questions arising from the discretionary grants finding. The Committee further noted that the department needed to urgently review its oversight mechanisms across all SETAs, implement a system requiring entities to commence building procurement processes at least twelve months before lease expiry, and develop a tracking database of senior SETA officials to prevent individuals with problematic employment histories from resurfacing at other entities unchecked. Documentation Required from the ETDP SETA The Committee resolved that the following documentation must be submitted to the committee secretariat: The SETA must provide email correspondence confirming all submissions of supporting documentation made to the AGSA during the 2024/25 audit process, as digital verification of the SETA's assertion that documentation had been submitted. The SETA must provide the BEC report for the Mooi Street building procurement, including the names and positions of all individuals who served on the BSC, BEC and BAC, respectively. The SETA must provide the preliminary forensic report, subject to the SETA first obtaining a legal opinion confirming that sharing the report would not compromise its legal position in the matter currently before the court. The SETA must provide the letter of precautionary suspension issued to the CFO. The SETA must provide the turnaround plan submitted to the Director-General (DG), including all deadlines and timelines for deliverables. The SETA must provide a breakdown of the R8.97 million paid for the Mooi Street building on a month-by-month basis, reflecting all cost components including rental, parking, utilities and operational costs. The SETA must confirm in writing the outcome of the documentation submission to the AGSA due on the day following the meeting. The Committee further noted that it would reconvene on the matter following the AGSA's presentation of the 2025/26 audit outcomes in October, at which point it would assess whether the corrective measures committed to during the meeting had been implemented and whether the findings of the 2024/25 audit had been adequately addressed.