Nzimande blamed for corruption at Services SETA

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By: Steve Motale

JOHANNESBURG- Corruption in the Services Sector Education and Training Authority (SSETA), commonly referred to as Services SETA, has reached endemic levels. This is according to whistle-blowers within the entity who have asked for the intervention of President Cyril Ramaphosa.

Whistle-blowers who spoke to Africa News 24-7 on condition of anonymity blame Higher Education, Science and Technology Minister Blade Nzimande under whose department all 21 SETAs fall.

Sources have told Africa News 24-7 that many Services Seta employees who have blown the whistle on corruption were being victimised, with many being suspended or dismissed. Whistle-blowers say Nzimande is aware of the graft but is deliberately turning a blind eye to it to protect some officials. Africa News 24-7 has seen the latest Auditor General’s (AG) draft report into the Services Seta according to which the entity has regressed from a clean audit opinion to a qualified audit opinion.
“This is as a result of deficiencies identified in the internal control environment which have resulted in material misstatements and instances of non-compliance being identified,” says the AG’s 2018/19 report. The report put the blame on senior management which “did not adequately oversee the operations of the entity, as financial statements contained material misstatements not detected by the entity’s system of internal control”.
Corruption whistle-blowers highlighted included supply chain management irregularities, conflicted board members and overpayment of learner bursaries which they say is a deliberate act by corrupt Services Seta officials who connive with university officials. In one instance, which the AG also highlighted, some student accounts were paid to institutions of higher learning, exceeding by far Services Seta’s bursary limit.
In one instance a university student account was overpaid by a whopping R295 810.59. Whistle-blowers claim these overpayments are as a result of collusion between corrupt Services Seta and university officials who share the overpayments among themselves. The AG also raised a red flag about a more than R162-million contract entered into by the Services Seta subcontracted out to an offshore company not registered in SA, in breach of procurement regulations. The contract started in November 2017 and is due to end on March 2020. Sources say the total for the contract would amount to much more than the given total at the end of this period.
The contract is for processing learner stipends payments directly to learners and provision of the rollout and management of the biometric learner attendance monitoring system (Blams). The AG found among other irregularities that there was no briefing session for the tender. “The advertisement by management was not transparent enough about the purpose of the tender in contravention of Section 51 of the Public Finance Management Act (PFMA), the preferential regulation and therefore irregular,” says the AG.
Of the eight bids received, Grayson Reeds consortium was awarded the R162m contract. The consortium, is made up of Grayson Reeds Consulting (Pty) Ltd, Kulanati Financial Solutions and The Dram Group Holdings. The AG found that the central supplier database (CSD) report for Dram Holdings is for a different company, Africawide Fintech SA, while Dram Holdings could not be found on Companies and Intellectual Property Commission (CIPC).
Another discrepancy noted by the AG was that the service level agreement (SLA) between Services Seta and Grayson Reeds reflected the registration number of another company, Muroba Group Holdings. “The appointment of Grayson Reeds is regarded as irregular and all payments should be disclosed in the financial statement accordingly. Management should consider investigating the appointment of the consortium and also ensure that it investigates the legality of the three companies relating to the bid,” says AG’s report.
Whistle-blowers have laid the blame on corruption within Services Seta on Nzimande’s shoulders, who they accuse of failing to ensure that Services Seta implements the recommendations of National Skills Authority (NSA) report whose investigation was commissioned by former Higher Education and Training Minister Naledi Pandor last year.
The NSA, an advisory body to the ministry, investigated allegations of corruption and maladministration within Services Seta. Among other damning findings, NSA found that some of the projects approved by Services Seta’s management formed part of questionable R250m budget committed to the building of Training and Skills centres. In what appears to be a strange coincidence, one of the training centres built is in the Eastern Cape town of Cala, the hometown of ANC national chairperson and Mineral Resources and Energy Minister Gwede Mantashe, whose wife Nolwandle Mantashe is a board member of Services Seta.
The NSA report said the budget allocations for the training centres were made a mere six days before financial year-end. “No explanation was provided as to why these funds could not have been committed to projects earlier in the financial year and this issue requires further investigation. There does appear to be a trend by the services Seta increasing the procurement amounts after the tender process is already completed, which suggests possible manipulation of the supply chain processes and warrants further investigation to establish whether financial misconduct has occurred,” says the NSA report.
A senior manager at Services Seta who declined to be identified for fear of victimisation said: “This is blatant corruption. It is not the mandate of Services Seta to build training centres. Services Seta’s primary function is to upskill the nation through learning programmes such as learnerships, skills programmes, internships, and other strategic learning initiatives.”
He added: “Clearly Minister Nzimande is either protecting corrupt Services Seta officials or he is benefitting directly from this corruption. Otherwise what explains his silence on this massive abuse of public resources, and why is he unwilling to see to it that recommendations of the National Skills Authority are implemented?”
In his reply to questions sent by Africa News 24-7, Nzimande’s spokesperson Ishmael Mnisi said the recommendations of the National Skills Authority were implemented by Minister Naledi Pandor “in that she called for certain actions, and Services Sector Education and Training Authority (“SSETA”) has already commenced with such actions and the department receives regular reports on progress”. Added Mnisi: “At the beginning of the year, Minister Pandor convened a meeting with all the members of the Accounting Authority (AA). In the meeting, she impressed on all the AA members to work together, diligently and fight all forms of corruption. She expected the Accounting Authority to deal with such matters when they arise.”
Asked about the R162m 29-month contract that Services Seta entered into with Grayson Reeds, Mnisi said: “The Department is not aware of the allegations outlined in your question. It, therefore, follows that it has no knowledge of truthfulness or otherwise thereof.” Asked about the AG’s latest report into Services Seta, Mnisi said: “As far the Minister is aware, the Auditor- General is still busy with the auditing process at the SSETA.”