Higher Education and Training Minister Buti Manamela has called for urgent corrective action at the Construction Education and Training Authority (CETA) and the Services Sector Education and Training Authority (Services SETA), following qualified audit opinions for the 2025/26 financial year.
Briefing Parliament’s Portfolio Committee on Higher Education and Training recently, Manamela said both institutions need to address persistent governance and financial control weaknesses and demonstrate that public funds are translating into skills development, employment opportunities and improved livelihoods.
The two SETAs were placed under administration in August 2025 following governance and operational difficulties, and both remain under administration until 31 January 2027.
“Administration is an intervention. It is not an outcome. Its success lies in whether the institution emerges with stronger governance, credible financial controls, capable leadership, improved service delivery and renewed public confidence,” Manamela said.
The qualified audit opinions received by both institutions indicate that material issues remain unresolved, requiring corrective measures supported by evidence, the Minister said.
The department has required both administrators to develop audit action plans with clear responsibilities and timeframes.
Manamela noted that CETA achieved 58 of its 68 annual performance targets, approximately 85% of its targets.
However, he said its financial position raised concerns, with revenue of about R914 million against expenditure of R1.25 billion, resulting in a deficit of approximately R336 million.
Its cash balance also declined from about R1 billion to R607 million, while significant discretionary grant commitments remain outstanding.
Manamela said the institution cannot continue drawing down its reserves without addressing the structural causes of the financial imbalance.
He also highlighted accumulated irregular expenditure of approximately R956 million and fruitless and wasteful expenditure of R44 million, which he said reflected serious historical control failures.
“Two material irregularities are particularly troubling. In an artisan-development project, approximately R15.75 million was paid without the intended benefits being delivered. For a learner biometric attendance and stipend-payment system, approximately R13.26 million was paid for a system never fully operationalised.
“Together, that is approximately R29 million in reported losses. When public money is spent on training, we must be able to identify what was delivered. Where losses occurred, we must determine responsibility and pursue recovery and consequence management,” Manamela said.
He called for a complete account of investigations, legal steps, responsibility assessments and possible recovery measures.
“I will not pre-empt any proceedings, but the passage of time must not become an excuse for institutional inaction.”
Manamela also raised concerns about the reported prescription of a contractual claim against the supplier involved in the artisan development project, saying the department expects the institution to account for its response and the available recovery options.
Services SETA urged to address delayed bursaries
Services SETA recorded revenue of approximately R2.5 billion, expenditure of R1.9 billion and a surplus of approximately R562 million, partly attributable to delays in programme implementation.
Manamela warned that money remaining unspent cannot be regarded as an achievement, if eligible learners have not been trained, bursaries remain unpaid or employers cannot access support.
He expressed particular concern about delayed bursary payments affecting students at universities and Technical and Vocational Education and Training (TVET) colleges.
“Behind a delayed bursary may be a student unable to register or pay for accommodation.
"The Administrator must give this Committee a clear account of outstanding bursary obligations, reasons for the delays, and the timetable for resolution."
Manamela said financial controls and learner delivery must reinforce, not undermine each other.
Governance transition must be completed
With the administration period due to end in January 2027, Manamela said the remaining months should be used to stabilise executive structures, appoint Accounting Authorities, strengthen financial controls, resolve audit findings and prepare comprehensive handover reports.
He expressed concern about delays in governance appointments, including difficulties in securing suitable nominations for chairpersons and completing organised labour representation.
The Minister said the department will require a verified exit assessment covering governance readiness, financial sustainability, audit improvements, unresolved legal matters and outstanding commitments before the institutions return to ordinary governance.
He warned against a cycle of governance failure, administration, a new Accounting Authority and then another intervention.
“The real test of administration is whether the improvements survive the Administrator’s departure,” he said.
Comprehensive skills development priorities
Manamela also outlined wider priorities for the post-school education and training sector (PSET), including the stabilisation of the National Student Financial Aid Scheme (NSFAS) and the development of a credible, sustainable student funding model.
He urged prospective students to apply for NSFAS funding for the 2027 academic year before the deadline on 31 October 2026.
The Minister further stressed the need for the department and the National Skills Fund to address concerns raised by learners in the Denel Training Programme regarding delayed stipends, accommodation, transport, tools, safety, and the completion of their training.
He said the department is considering broader reforms to the SETA landscape, subject to consultation, legal compliance and fiscal assessment.
Manamela called for time-bound plans to resolve outstanding audit findings, transparent reporting on expenditure and financial sustainability, appropriate consequence management, improved delivery of bursaries and workplace learning, and a managed transition to stable governance structures. – SAnews.gov.za
