PSETA PRESENTATION

1
PSETA PRESENTATION
ON THE REPORT FORENSIC INVESTIGATION INTO THE
NATIONAL SKILLS FUND (NSF) AND GRANT
DISBURSEMENTS ACCOUNTS OF THE PSETA

• TO THE PORTFOLIO COMMITTEE ON PUBLIC SERVICE AND
  ADMINISTRATION
• 9 MARCH 2011

2
TABLE OF CONTENTS

• EXISTENTIAL HISTORY PSETA
• BACKGROUND TO NSF PROJECT
• FINANCIAL MALADMINISTRATION OF PROJECT
• SUMMARY OF FORENSIC INVESTIGATION REPORT
• ACTION BY THE PSETA and DPSA
• END OF PRESENTATION

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EXISTENTIAL HISTORY PSETA

• Established 2000 in terms of the Skills
  Development Act
• Turned into a DPSA unit rather than a
  self-standing SETA
• Feb 2001 Listed as Schedule 3 public entity in
  terms of the PFMA
• Nov 2001 Delisted as a public entity
• April 2006 relisted but
• - DPSA acting as administrative and corporate
  management agent
• - Staff seconded from DPSA

4
EXISTENTIAL HISTORY PSETA Cntnd

• March 2010 DPSA-PSETA decision and MOA to ensure
  PSETA operational independence, i.e.
  responsibility for own administration
  and corporate management
• Aug 2010 PSETA Board appointed CEO and CFO
• Sept 2010 PSETA placed under Administration
  by MHET
• Nov 2010 PSETA re-certified for a year
• March 2011 New Constitution finalised by
  stakeholders and new Board to be
  appointed
• April 2011 New organisational structure coming
  into effect, including Projects Office

5
BACKGROUND TO NSF PROJECT

• 2004 PSETA-NSF agreement for PSETA-run,
  NSF-funded, Learnership
• R106m budget Learners Allowances, Training,
  Admin and Project Salaries
• Quarterly progress reports were to be submitted
  to DoL according to records reports were duly
  submitted
• Project was supposed to run for 12 months March
  2005 to April 2006
• Project was run in a total of 5 provinces MP
  NWP NC KZN and EC
• Project ran its full course but was never
  properly closed

6
FINANCIAL MALADMINISTRATION OF PROJECT

• 2005 PSETA alerted to possible fraud on two
  banking accounts
• Complaint laid with the SAPS
• Commercial Crimes Unit investigated the matter
• Projects Finance Manager arrested, subsequently
  convicted in 2009 on 38 counts of fraud or theft
  and sentenced to 10 years in prison
• SIU recommended that matter be referred to
  forensic auditors for conclusive quantification
  of the extent of the fraud
• 2007 PWC appointed to conduct the investigation
• Final investigation report submitted by PWC on 1
  July 2010

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SUMMARY OF FORENSIC INVESTIGATION REPORT

• Interference with learners banking details
  fraudulent alterations made
• Authorising officials approved some payments
  without proper review
• R1 466 319.10 paid into alleged fictitious
  accounts
• No matching of account holder with account number
  before payment
• Irregular payments of R55 100.00 processed by 2
  authorizers and effected from Grant Disbursement
  account
• Some learners on SAQA records untraceable to
  application forms
• Potential R10 853 850.64 fraud no evidence of
  payment to legitimate bank accounts
• Recommended that matter be referred back to the
  SIU for finalization

8
ACTION BY THE PSETA, DPSA AND THE NSF

• PSETA referred two former Project Members back to
  DPSA on suspicion of negligence. DPSA has
  commenced disciplinary process re the two
  officials
• PSETA and DPSA have engaged SIU in line with
  Investigation Reports call
• Scope of the SIU since extended to include other
  suspected irregular and fruitless expenditure in
  the PSETA
• Joint PSETA-DPSA Team being established by MPSA
  to source all internal info and coordinate full
  PSETA and DPSA cooperation with SIU investigation
• Projects Office established at the PSETA for
  proper management of projects. Projects Manager
  and Project Accountant posts created
• PSETA and NSF have agreed on process to properly
  close the Project and have committed to pressing
  criminal and civil charges against anyone found
  by the SIU to have defrauded the Project and the
  PSETA

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END OF PRESENTATION

• Thank You