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DEPARTMENT OF HIGHER EDUCATION & TRAINING

DEPARTMENT OF HIGHER EDUCATION & TRAINING. SETA GRANT REGULATIONS 26 FEBRUARY 2013. Overview. Problem statement Policy options 3 Amendments 4 Guidelines for SETAs 5 Way forward. The Problem Statement. Funding of the QCTO

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DEPARTMENT OF HIGHER EDUCATION & TRAINING

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  1. DEPARTMENT OF HIGHER EDUCATION & TRAINING SETA GRANT REGULATIONS26 FEBRUARY 2013

  2. Overview • Problem statement • Policy options 3 Amendments 4 Guidelines for SETAs 5 Way forward

  3. 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.

  4. 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

  5. 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

  6. 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;

  7. 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

  8. 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.

  9. FINANCES Regulation 3 : SETA Finances A SETA must use all monies received in terms of the Skills Development Levies Act to- • 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.

  10. 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.

  11. 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).

  12. 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.

  13. 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.

  14. 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 sub-regulation (10), to access the discretionary grants.

  15. 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 – • 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

  16. 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.

  17. 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.

  18. 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.

  19. 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.

  20. TEMPLATES IMPORTANT TEMPLATE CHANGES Key changes: Age Profile – e.g. 18 – 24, 25 – 35, etc Geographical location – Local Municipality and Province Planned beneficiaries for PIVOTAL Programmes – This plan submission does not form part of the formal discretionary grant applications Trained beneficiaries for PIVOTAL Programmes to be reflected in Pivotal Training Report Level of training – Entry = NQF 1 - 4, Intermediate = NQF 5 – 6 and Advanced = NQF 7 – 10 Educational Institution Impact Assessment Start and end date of training Indicate whether the training has been completed Training Committee nominated Union/Labour representative to sign off on application. A simplified format for companies employing fewer than 50 employees will be made available.

  21. DATE EFFECTIVE • 1 April 2013

  22. DHET SETA GRANT REGULATION SARS COLLECT LEVIES 100% R1,200 m NSF 20% R240 m merSETA 80% R 960 m Employer 1% of Payroll 10,5% admin R126 m QCTO Admin .5% R6 m 20% Mandatory Grant R240 m Sign off by all Stakeholders Could be higher based on interest and unclaimed Grants Discretionary Grant 49,5% R594 m 80% of Pivotal R475,2m 20% DG R118,8 m Interest & Unclaimed Mandatory Grants

  23. Thank You ! Dr Raymond Patel Chief Executive Officer Wayne Adams Chief Operations Officer

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