Cape Town - Minister of Higher Education and Training, Blade Nzimande, has placed the Wholesale and Retail Sector Education and Training Authority (W&RSETA) under administration because it failed to address concerns Nzimande had raised earlier.
The actions of the W&RSETA’s board “compromised” an agreement earlier signed with the Unemployment Insurance Fund (UIF) and the Department of Small Business Development to help boost small and medium enterprises and enterprises in townships and rural areas through a revitalisation programme, he said in a statement.
“The board took a decision, which is disputed by some board members, to completely withdraw from this programme and its funding without communicating or consulting the Department and relevant partners,” Nzimande said in a statement. “However, some members of the board claim the resolution was to amend the agreement and not withdraw.”
Nzimande said this action has the potential to bring the Department of Higher Education and the Sector Education and Training Authorities (SETA) system into disrepute.
“It furthers says volumes about the unity and cohesion of the board and its ability to take decisions, including exercising its fiduciary responsibilities. I am disappointed and aggrieved by the actions of this board and I am convinced they are not acting in the interest of the organization. They are not averse to the implications of their decisions on the country and unemployment rate we face,” Nzimande said.
In addition, W&RSETA received a qualified audit opinion from the Auditor-General in the 2014/15 financial year. The Minister requested the board to submit a comprehensive plan to address concerns raised in the opinion, however the response, according to Nzimande was “inadequate”.
This led to a subsequent qualified audit opinion in the 2015/16 financial year.
Nzimande also raised concerns about the appointment of the chief financial officer who was subsequently appointed as the chief executive officer (CEO) and chief officer for qualifications.
“The Minister and Department are of the view that these appointments compromise the effectiveness of internal control processes and exposes the SETA to a risk of self-review. This meant the acting-CEO would have been reporting to herself on operational tasks she performs. A letter from the Auditor-General to the Director-General confirms this concern,” the statement read.
The National Skills Authority was requested to do an investigation and during its investigations, it found that some of the board members were not aware of the instruction letter from Nzimande. “This further demonstrates lack of unity, cohesion and cooperation required among board members to exercise their fiduciary duties effectively and efficiently.”
Nzimande concluded that he hasn’t taken the decision to put the entity under administration lightly.
“I could not allow W&RSETA to proceed in this manner and collapse the organisation given the veracity of challenges they face."
The entity will be under administration for a 12-month period.Read Fin24's top stories trending on Twitter: Fin24’s top stories