DEPARTMENT OF HIGHER EDUCATION & TRAINING
SETA GRANT REGULATIONS
26 FEBRUARY 2013
Overview
1
2
3
4
5
Problem statement
Policy options
Amendments
Guidelines for SETAs
Way forward
The Problem Statement
Funding of the QCTO
There is a need to put in place proper funding arrangements for the QCTO that
recognises the reduced work required of SETA ETQAs. One of the problems is
that currently there is not a planned reduction in SETA ETQA functions, and so
the funding issue is complicated.
PIVOTAL/Scarce and Critical Skills
There is a commitment in NSDSIII to increasing the funding for PIVOTAL
programmes and in particular increasing the focus of SETAs on addressing
scarce and critical skills but many SETAs appear to have spent considerable
sums on short courses.
WSPs/ATRs
There has been a trend of WSPs and ATRs being submitted for compliance
purposes – specifically to enable employers to recoup 50% of their levies from
the SETA. The quality of WSP and ATR data is often not checked.
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The Problem Statement continues
Terminological challenges
There are some quite serious terminology challenges in the current skills
development legislative and regulatory framework, including:
“levies paid by employers”
“Admin” costs and “project administration” costs
PIVOTAL programmes
“surplus” versus “not committed”
Work Integrated Learning (WIL) vs Workplace Experience
Wider strategic challenges
There is a need to position SETAs as part of the developmental state
There is a need to change the balance between private and public
provision of skills development programmes
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The Problem Statement : Options
The Policy Options
The following policy options were considered:
Option 1: Direct funds to PIVOTAL programme
Option 2: Contain administrative costs
Option 3: Reduce carry-over and eliminate “reserves”
Option 4: Provide for funding of the QCTO
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DEFINITIONS
Regulation 1: Definitions
‘PIVOTAL is an acronym’ which means professional, vocational, technical and academic learning
programmes that result in qualifications or part qualifications on the National Qualifications
Framework as contemplated in regulation 3(6) and (7) as read with regulation 6(11) to (15);
‘surplus’ means a favourable residual balance in the statement of financial performance for the
financial year ending on 31 March less current liabilities and commitments to training of learners in
programmes funded from discretionary funds; ‘commitments’ in this context mean that contractual
obligations exist at the end of the financial year that will oblige the SETA to make a payment or
payments in the ensuing year; a ‘contractual obligation’ means there is an agreement (written) with
specific terms between a SETA and a third party whereby the third party undertakes to perform
something in relation to a discretionary project for which a SETA will be obliged to make payment
against the discretionary grant;
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DEFINITIONS
Regulation 1: Definitions
‘structured workplace learning’ means the component of learning in an occupational qualification,
an internship, or work placement for professional designation whereby a learner is mentored by a
qualified, and where required, registered mentor in the application and integration of the
knowledge and practical skills learnt, under supervision, in the actual context of a workplace in
accordance with the prescripts set by the relevant qualification authority or professional body;
‘work integrated learning’ is an umbrella term to describe curricular, pedagogic and assessment
practices, across a range of academic disciplines that integrate formal learning and workplace
concerns, which culminate in a qualification or part qualification and can include practicals,
professional practice, internships, workplace experience, industry-based learning, cooperative
education, service learning, real work learning, placements, experiential learning, clinical
placements; and
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ADMINISTRATION
Regulation 2: Limitation on administration costs of a SETA
In terms of section 14(3)(b) as read with sections 14(3A)(a) and 14(3B) of the
Act, a SETA may not use more than 10.5% of the total levies paid by the
employer as allocated in the Act received in any year to pay for its
administration costs in respect of that financial year.
From 1 April 2013, a SETA will transfer as part of its administration costs as
contemplated in sub-regulation (1) and approved in the annual SETA strategic
plan, an amount that does not exceed 0.5% of the total levy paid by the
employer to the QCTO for quality assurance functions as contemplated in
section 26H of the Act, and the actual quantum of funds to be transferred will
be determined by the Minister by 31 July of each year.
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FINANCES
Regulation 3 : SETA Finances
A SETA must use all monies received in terms of the Skills Development Levies Act toa.
b.
c.
administer the activities of the SETA;
pay employers their mandatory grants; and
Implement Strategic Plan and Annual Performance Plan as contemplated in the
Treasury Regulations issued in terms of the Public Finance Management Act
through the allocation of their discretionary grants.
Any unclaimed mandatory grants and any interest earned on funds must by 15 August
of each financial year be placed in the discretionary fund.
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FINANCES
Regulation 3 : SETA Finances
The amount in the discretionary fund on 1 April each year, together with
the discretionary allocation from levy income received each month, must
be spent or committed in the ensuing twelve months.
A SETA is required to allocate 80% of its available discretionary grants
within a financial year to PIVOTAL programmes that address scarce and
critical skills in its sectors.
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FINANCES
Regulation 3 : SETA Finances
At the end of each financial year, it is expected that a SETA must have spent
or committed (through actual contractual obligations) at least 95% of
discretionary funds available to it by the 31 March of each year and a
maximum of 5% of uncommitted funds may be carried over to the next
financial year.
The remaining surplus of discretionary funds must be paid by the SETA by 1
October of each year into the National Skills Fund (NSF).
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MANDATORY GRANT
Regulation 5: Allocation of mandatory grants
With effect from 1 April 2014, an application for a mandatory grant in terms of
sub-regulation (1) must be submitted by 30 April of each year.
20% of the total levies paid by the employer in terms of section 3(1) as read with
section 6 of the Skills Development Levies Act during each financial year will be
paid to the employer who submits a WSP and ATR.
If the levy paying employer does not claim a mandatory grant within the time
period specified in sub-regulation (2), the SETA must transfer the levy paying
employer’s unclaimed mandatory grant to the discretionary grant by 15 August of
each year.
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MANDATORY GRANTS
The Workplace Skills Plan, Annual Training Report, Pivotal Plan and Pivotal Training
Report must be signed off by the respective Labour representative within organisations.
Minutes of Training Forum meetings must be submitted in support of applications.
Mandatory Grant applications must be aligned to the merSETA Sector Skills Plan (SSP)
the emphasis being on the priority skills identified within the SSP.
Where available, all learning interventions shall be aligned to SAQA registered
qualifications and unit standards where such qualifications and unit standards are
available. All learning interventions to be carried out by an accredited institution.
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DISCRETIONARY GRANT
Regulation 6: Allocation of discretionary grants
A SETA may determine and allocate discretionary grants in support of the
implementation of its SSP
A SETA must, on an annual basis, and in accordance with any guidelines
issued by DHET, approve a Discretionary Grants Policy, specifying how the
SETA discretionary funds will be allocated to meet sector needs as set out in
the SSP.
The Discretionary Grants Policy must set out the funding framework, the
different delivery models and project types that will be deployed and the
mechanism for SETA member organisations, as contemplated in subregulation (10), to access the discretionary grants.
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DISCRETIONARY GRANT
Regulation 6: Allocation of discretionary grants
The Discretionary Grants Policy must set out how PIVOTAL programmes can be
delivered through public education and training institutions.
The Discretionary Grants Policy must –
(i) indicate the purpose of the various grants, funding frameworks and projects
and specify what is intended to be funded from the grant, including any
administrative costs that may be considered appropriate by the Accounting
Authority;
(ii) provide for procedures and communication on strategy with potential
beneficiaries as contemplated in sub-regulation (10) that set out timeframes
for processing of applications, communication of decisions,
and payment schedules
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DISCRETIONARY GRANT
Regulation 6: Allocation of discretionary grants
A key focus of SETAs must be to address scarce and critical skills through
programmes that are designed to address such skills needs, and which include
work integrated learning.
At least 80% of discretionary grant funding must be allocated to PIVOTAL
programmes.
A SETA may allocate a maximum of 20% to funding of programmes, other than
PIVOTAL programmes, to develop the sector in accordance with the priorities
outlined in the SSP.
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PURPOSE OF SETA GRANTS POLICIES AND PROCEDURES
 Provide basis for SETA to disburse grants
 SETAs need to act in manner that is transparent and fair, and achieves
value for money spent. Policies must be set out in a manner that is
understood by SETA member companies and stakeholders, and show how
grants and SETA funded projects can be accessed.
 Policies set out what SETA are trying to achieve. In setting out policy for
grants, SETA is stating how it is allocating resources to achieve its strategic
goals and objectives. And it is putting in place a mechanism for reviewing
policy after implementation.
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GUIDELINES ON DEVELOPING GRANTS POLICIES AND PROCEDURES
MANDATORY GRANTS
• Must emphasise importance of the 20% grant for submitting WSP, ATR, PP and
PTR
• This grant encourages employers to provide data to SETA on their workforce and
skills needs. Data must be accurate and well prepared so SETA can use it to
establish skills needs in sector
• WSPs need to reflect the actual needs of the employer. This is reason for
regulations stating that mandatory grants are dependent on submission of WSPs
and ATRs that are approved by SETA
• SETAs must find way of verifying accuracy of data they receive and must not just
use WSPs and ATRs as a trigger for grant payments. If they are seen
by SETA as purely there for compliance purposes, employers will
treat them in the same way.
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APPROVAL
Approval of grants by a SETA
The SETA criteria for grants must be approved by the SETA Accounting
Authority before funds are allocated.
Grant disbursement schedule
SETA must prepare and distribute a schedule setting out the criteria in terms
of regulations 4 and 6 and the dates by which applications for grants must
be submitted, as well as timeframes for disbursement of grants.
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TEMPLATES
IMPORTANT TEMPLATE CHANGES
Key changes:
1.
Age Profile – e.g. 18 – 24, 25 – 35, etc
2.
Geographical location – Local Municipality and Province
3.
Planned beneficiaries for PIVOTAL Programmes – This plan submission
does not form part of the formal discretionary grant applications
4.
Trained beneficiaries for PIVOTAL Programmes to be reflected in Pivotal
Training Report
5.
Level of training – Entry = NQF 1 - 4, Intermediate = NQF 5 – 6 and
Advanced = NQF 7 – 10
6.
Educational Institution
7.
Impact Assessment
8.
Start and end date of training
9.
Indicate whether the training has been completed
10. Training Committee nominated Union/Labour representative
to sign off on application.
11. A simplified format for companies employing fewer than 50 employees
will be made available.
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DATE EFFECTIVE
• 1 April 2013
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DHET
SETA GRANT REGULATION
SARS
COLLECT LEVIES
100% R1,200 m
NSF
20%
R240 m
Employer
1% of Payroll
Could be
higher based
on interest
and
unclaimed
Grants
QCTO Admin
.5%
R6 m
Sign off by all
Stakeholders
80% of Pivotal
R475,2m
20% DG
R118,8 m
merSETA
80%
R 960 m
10,5% admin
R126 m
20% Mandatory Grant
R240 m
Discretionary Grant
49,5%
R594 m
Interest & Unclaimed
Mandatory Grants
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Thank You !
Dr Raymond Patel
Chief Executive Officer
Wayne Adams
Chief Operations Officer