By Lehlohonolo Lehana.
The National Skills Fund (NSF), which is meant to focus on the education and training of learners and post-school education, has made headlines again with millions of rands missing.
This follows the long-standing issue of R5-billion that “could not be properly accounted for over two financial years”, according to Higher Education Minister Blade Nzimande, causing an outcry from Parliament’s public funds watchdog and higher education committees.
The fund’s primary activities are focused on the education and training of learners, post-school education and training, and skills development research, innovation and advocacy.
The entity, which falls under the Department of Higher Education and Training, receives its revenue from skills development levies as well as interest earned on investments held by the Public Investment Corporation (PIC).
Nzimande had appointed Nexus Forensic Services firm to investigate projects of the National Skills Fund (NSF).
A report by Nexus Forensic Service’s audit of a select number of projects, shows the total amount of unaccounted funds is R286 million.
The money was intended to go towards NSF projects to help the poor.
Parliament has been aware of the report since 2022 and the Hawks are continuing their investigations into the NSF beneficiaries.
Nzimande said the report contained the names of implicated persons, which could lead to possible litigation against the department.
Fund recipients in the Eastern Cape failed to account for a R131 million advance they were given to train 1 025 artisans, City Press reports.
The contract to training people from Bizana and Lusikisiki was supposed to run for nine months at a total cost of R187.4 million.
A short-lived KZN rabbit farm spent only R1.6 million of their R123 million grant on matters relating to rabbit breeding.
The report stated that when investigators went to visit the rabbit farm, there was no indication that it existed.
Investigators found evidence of fraud, forgery and nondelivery of services by companies, even though they had been paid. Instead, the beneficiaries bought luxury cars and embezzled funds, with one service provider buying a farm, while the community corporations which had expected to benefit from the aid suffered
In other examples, an Ekurhuleni TVET is alleged to have wasted R17 million, while a human resources consultancy received R13.4 million that they could not account for when their contract was cancelled. A TVET college in Port Elizabeth could not account for R1.2 million of the R7 million received from the NSF.
Irregular site visits, poor record-keeping and lack of thorough verification were all listed as contributing factors to the alleged misappropriation.
“Almost all the tender entities breached the provisions of the memorandums of agreement by not opening a dedicated bank account to deposit the funds paid by the NSF,” stated Parliamentary Monitoring Group’s summary of the report.
Citing the examples given, the DHET’s reports noted that NSF staff failed to ensure proper compliance, resulting in unfit companies being granted funds.
According to the NSF 2021/2022 Annual Report, the entity received a qualified audit opinion from the Auditor-General’s (AG)’s office, with the office highlighting skills development as an issue. “The public entity did not have adequate systems in place to account for skills development funding,” read the notes from the AG.
In addition, AG Tsakani Maluleke said she was unable to obtain “sufficient appropriate audit evidence that skills development funding for the current and previous years had been properly accounted for, as evidence that the services had been received could not be provided”.
The AG said this was due to “inadequate project monitoring and expenditure approval processes. I was unable to confirm the skills development funding by alternative means, as the public entity’s systems did not permit this.”