Parliament, Thursday, 13 February 2025 – The Portfolio Committee on Higher Education expressed deep concern during a briefing yesterday over the ongoing decline of the National Skills Fund (NSF).
The NSF presented its audit action plan aimed at addressing the findings highlighted by the Auditor-General (AG) in the 2023/24 annual report. However, the committee remains unconvinced that the entity is on track to resolve its systemic challenges.
The committee emphasised that, in its current state, the NSF is ill-equipped to make a meaningful contribution to addressing South Africa’s skills deficit. This is due to significant internal deficiencies, including the underspending of R3.7 billion during the 2023/24 financial year. The committee highlighted that such underspending is particularly alarming given the country’s high youth unemployment rate and the growing despair among young people about their future prospects.
A major point of concern was the absence at the meeting of the NSF’s accounting authority and the Department of Higher Education’s executive authority, which the committee described as unacceptable. Additionally, the committee had serious concerns about the payment of skills development funds directly into the business accounts, instead of the interest-bearing accounts of skills development providers (SDPs). The NSF’s justification that rural-based SDPs face challenges in opening interest-bearing accounts was dismissed as inadequate.
Committee Chairperson Mr Tebogo Letsie highlighted further irregularities, stating, “Despite having clear guidelines and procedures for funding skills development, the NSF has allowed payments to Medirwe Investments without following due processes. The misappropriation of funds intended to upskill and reskill young people is deeply troubling. Equally concerning is the lack of consequence management for officials responsible for these unauthorised transfers.”
The committee also criticised the Department of Higher Education and Training for redeploying NSF officials who were implicated in the Nexus Forensic Report to other directorates within the department. This move, the committee argued, sets a dangerous precedent and undermines accountability.
The committee resolved to invite the Minister of Higher Education and Training and the Director-General to appear before it and account for the state of affairs at the NSF. Furthermore, the committee will write to the Minister, urging engagement with the President to expand the mandate of the Special Investigating Unit to include a comprehensive probe into NSF projects.
The committee reiterated its commitment to ensuring transparency, accountability and effective governance within the NSF to ensure it fulfils its mandate of addressing South Africa’s critical skills shortages.
ISSUED BY THE PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSON OF THE PORTFOLIO COMMITTEE ON HIGHER EDUCATION, MR TEBOGO LETSIE.
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